Question 2 (5 pes) Fon of the hat i - Show a. Declaration and distribetion of as

Question

Question 2 (5 pes) Fon of the hat i - Show a. Declaration and distribetion of asock dividend mortization of intangibile assets S 160 c Aequired treasury shock for S150000 cash d. Increase of the deferred sax Tiability oft $5,000 e. Amortization of bond premium $3,000 t. Payment of cash dividends $5,000 g Amortization of bond discoust $2,000 h. Converted preferred stock to common stock i. The balance in Investment in Comell stock increased $1,000asa of wing oqiy method. j. Machinery costing $65K with $60K accumuilatod depreciatiom sold for $7 ,00

Explanation / Answer

a) Declaration and Distribution of a stock Dividend = Not shown
b) Amortization of intangible stocks $ 16000 = Operating; Add to NI, $16000
c) Acquired treasurty stock for $150000 cash = Financing (150000)
d) Increase of the deferred stock liability of $55000 = Operating; Add to NI, $55000
e) Amortization of bond premium $ 3000 = Operating; deduct from NI, $3000
f) Payment of cash dividends $5000 = Financing (5000)
g) Amortization of bond discounts $2000 = Operating; Add to NI, $2000
h) Converted preferred stock to common stock = Not shown
i) The balance in Investment in cornell Stock increased $11,000 as a result of using theequity method. = Operating; deduct from NI, $11000
j) Machinery costing $65K with $60K accumulated depreciaiton sold for $7000 = Operating; Deduct from NI, $2000 (Gain), Investing 7000

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