Question

Effect of Transactions on Cash Flows

State the effect (cash receipt or cash payment and amount) of each of the following transactions, considered individually, on cash flows:

Retired $200,000 of bonds, on which there was $2,000 of unamortized discount, for $208,000.

Sold 7,000 shares of $25 par common stock for $56 per share.

Sold equipment with a book value of $47,900 for $69,000.

Purchased land for $409,000 cash.

Purchased a building by paying $94,000 cash and issuing a $120,000 mortgage note payable.

Sold a new issue of $190,000 of bonds at 99.

Purchased 3,100 shares of $15 par common stock as treasury stock at $29 per share.

Paid dividends of $1.7 per share. There were 26,000 shares issued and 4,000 shares of treasury stock.

	Effect	Amount
a.	Cash receipt	$
b.	Cash receipt	$
c.	Cash payment	$
d.	Cash payment	$
e.	Cash receipt	$
f.	Cash payment	$
g.	Cash payment	$
h.	Cash payment	$

Answer 1

	Transactions	Effect	Amount
a	Retired $200,000 of bonds, on which there was $2,000 of unamortized discount, for $208,000	Cash payment	$208,000
b	Sold 7,000 shares of $25 par common stock for $56 per share. [ 7,000 Shares x $56 ]	Cash receipt	$ 392,000
c	Sold equipment with a book value of $47,900 for $69,000.	Cash receipt	$69,000
d	Purchased land for $409,000 cash.	Cash payment	$409,000
e	Purchased a building by paying $94,000 cash and issuing a $120,000 mortgage note payable.	Cash payment	$94,000
f	Sold a new issue of $190,000 of bonds at 99. [ $190,000 x 0.99 ]	Cash receipt	$ 188,100
g	Purchased 3,100 shares of $15 par common stock as treasury stock at $29 per share. [ 3,100 x $29 ]	Cash payment	$ 89,900
h	Paid dividends of $1.7 per share. There were 26,000 shares issued and 4,000 shares of treasury stock. [ 26,000 – 4,000 ] x $1.70	Cash payment	$ 37,400

**Hiii… The transactions given in the questions are not serially numbered, So I Inserted additional one column for the transactions for better understanding…Thanks