Investing and Financing Cash Flows During the year, Paxon Corporation’s Long-Ter

Question

Investing and Financing Cash Flows During the year, Paxon Corporation’s Long-Term Investments account (at cost) increased $15,000, the net result of purchasing stocks costing $80,000 and selling stocks costing $65,000 at a $6,000 loss. Also, the Bonds Payable account decreased by $40,000, the net result of issuing $100,000 of bonds at 103 and retiring bonds with a face value (and book value) of $140,000 at a $9,000 gain. What items and amounts will appear in the (a) cash flows from investing activities and the (b) cash flows from financing activities sections of Paxon’s statement of cash flows?

a.

b.

Cash flow from investing activities will show Purchase of Stock Investments $Answer Sale of Stock Investments Answer

Explanation / Answer

Cash flow from investing activities will show Purchase of stock investment -$80,000 Sale of stock investment $59,000 Cash flow from financing activities will show Issuance of bonds $1,03,000 Retirement of bonds -$1,49,000

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