Question

Using the direct method, and the information in the exhibits, prepare the financing activities section of the statement of cash flows for Alaskan Travels, Inc., as of December 31, Year 2. In the first column, from the option list provided, select the description for cash flows that are clearly from financing activities. In the second column, enter the amounts that will be reported in the financing activities section of the statement of cash flows. Indicate negative numbers by using a leading minus (-) sign.

	Cash flows from financing activities:	Net cash provided by (used in) financing activities:
1.
2.
3.
4.
5.	Total:

Meeting - Board of Directors

Alaskan Travels, Inc.

Seattle, WA

A meeting of the Board of Directors of Alaskan Travels, Inc., was held on May 11, Year 2, at 2:00 p.m. at the company offices in Seattle, Washington.

Those present were:

Carson Mitchel, Chairman of the Board, Wallace Shepard, President and CEO, Jeremy Cox, Suzanne Richardson, Tabitha Gillespie, and John Dillon (secretary).

Proceedings:

Mr. Carson Mitchel, Chairman of the Board, presided.

On motion and unanimously approved, the following resolutions were adopted:

BE IT RESOLVED, Alaskan Travels, Inc., will proceed with the purchase of the 20-acre parcel of land located at Jones Field for $150,000.

BE IT RESOLVED, Alaskan Travels, Inc., will reacquire common stock from Walter Morrison, to be held as treasury stock, for $100,000 cash.

BE IT RESOLVED, Conroy Aviation has agreed to accept common stock for settlement of our $1,000,000 bond payable.

Adjournment:

There being no further business to come before the meeting, it was on motion adjourned at 3:30 p.m.

Respectfully submitted:

John Dillon, Secretary

Press Release

Alaskan Travels, Inc., Declares Dividend

Seattle, WA, December 1, Year 2 - Alaskan Travels, Inc., a charter travel company, today announced that its Board of Directors declared a cash dividend of $1.25 per share of the company’s common stock. Alaskan Travels, Inc., currently has 64,000 shares of common stock outstanding.

The dividend will be paid on December 27, Year 2, to all common shareholders of record as of the close of business on December 15, Year 2.

About Alaskan Travels, Inc.

Founded in Year 1, Alaskan Travels, Inc., is a charter travel company located in Seattle, WA. The company provides chartered air and ground tours throughout Alaska.

From: Tom Pearson ([email protected])

To: Hannah Goodwin ([email protected])

Date: January 5, Year 3

Subject: Year 2 Securities Transactions

Hi Hannah,

I recorded the following securities transactions in Year 2:

1) Sold trading securities for $139,000
2) Purchased available-for-sale securities for $75,000

Additionally, there was a $22,000 cash purchase of inventory in November, Year 2.

Please let me know if you need any additional information.

Sincerely,

Tom Pearson, CFO

Alaskan Travels, Inc.

Resolution of the Board of Directors of

Alaskan Travels, Inc.

Seattle, WA

Declaration of Preferred Stock Dividends and Issuance of Preferred Stock

BE IT RESOLVED THAT:

1. The company declares, on this day, November 20, Year 2, the required annual cash dividend for preferred stock.

2. The dividend of $640,000 is to be set aside and distributed on March 15, Year 3.

3. The directors of Alaskan Travels, Inc., hereby certify that the preferred shareholders of record with the company will be provided with a copy of this notice.

4. On November 20, Year 2, Alaskan Travels, Inc., issued 10,000 shares of $3 par-value, 5% preferred stock for $55 per share.

The undersigned, being The Chairman of the Board for Alaskan Travels, Inc., hereby approves the foregoing resolution in accordance with the provisions of the company’s bylaws.

DATED the 20th day of November, Year 2.

Carson Mitchel

Carson Mitchel, Chairman of the Board

Palmer Aircraft Finance

Used Aircraft Purchase and Finance Agreement

December 31, Year 2

Borrower/Buyer: Alaskan Travels, Inc.	Principal Amount: $247,500
Seller: Queen Airway	Date: December 31, Year 2

Executed, this day of December 31, Year 2, this Used Aircraft Purchase and Finance Agreement is made between Alaskan Travels, Inc., of Seattle, Washington, and Palmer Aircraft Finance Company of Dallas, Texas.

Alaskan Travels, Inc., agrees to purchase from Queen Airway, one used multi-engine prop aircraft, VIN 74-811, for the sum of U.S. $275,000.

The lender, Palmer Aircraft Finance Company, agrees to finance 90%, or U.S. $247,500, of the purchase price of this aircraft.

The seller, Queen Airway, agrees to deliver aircraft upon (1) receipt of a cashier’s check from the buyer for 10% of the purchase price, or U.S. $27,500, and (2) execution of this finance agreement.

The borrower, Alaskan Travels, Inc., for value received, and prior to the delivery of said aircraft, promises to pay (1) to the seller, U.S. $27,500, in the form of a cashier’s check, and (2) to the lender, the principal sum of U.S. $247,500, with interest, at the annual rate of 12%. Payment of principal and interest will be made in 10 equal annual installments beginning December 31, Year 3.At any time while not in default under this Note, the borrower may pay the outstanding balance then owing under this Note to the lender without further bonus or penalty. Notwithstanding anything to the contrary in this Note, if the borrower defaults in the performance of any obligation under this Note, then the lender may declare the principal amount owing and interest due under this Note at that time to be immediately due and payable.

This note will be construed in accordance with and governed by the laws of the State.

Tom Pearson	Jenny Bolten	Graham Hollister
(signature of borrower)	(signature of seller)	(signature of lender)
Tom Pearson, CFO	Jenny Bolten, CEO	Graham Hollister, V.P. of Finance
Alaskan Travels, Inc.	Queen Airway	Palmer Aircraft Finance

ALASKAN TRAVELS INC CANCELED CHECK

Paid to the order of Hidden City Bank

123 Main St

Seattle Washington

Check amount $325,000

Check date 08/2/Year 2

Memo: Settlement of note payable - Tom Pearson

PAYMENT RECORD

Loan No.: 548761-21

Payment date: 08/2/Year 2

Principal: $310,000

Interest $15,000

Amount paid $325,000

Answer 1

Calculation of Financing Activities

S.No Cash flow from financing Activities Net cash provided by (used in) financing activities 1 Reacquire common stock from Walter Morrison, to be held as treasury stock -100000 2 Payment of Dividend (64000* $ 1.25) -80000 3 Issue of common Stock (10000*3) 30000 4 Issuance of 5% Preferred Stcok (10000*5) 550000 5 Proceeds from receipt of long term debt 247500 Net Cash proceeds from Financing Activities $152,500

Additional Points:

1.Cash Flow from Financing Activities means that all those activities whcih are carries out to finance the business.

2. Purchase of land and machinnery is an Investing Activity.

3.Acceptance of common stock in return of bond payable will not affect cash flow since cash is not affected,

4. Sale and purchase of in trade security is an investiong activity.

5. Dividend paid after 31st December shall not be included in cash flow activity.

.