The Gopher Company’s transactions during 2018 included the following: Paid cash
ID: 2577299 • Letter: T
Question
The Gopher Company’s transactions during 2018 included the following: Paid cash dividends of $1,200,000 Paid cash toward reducing a long-term note payable $900,000 Issued common stock in exchange for a building $750,000 Paid cash for bond interest $50,000 Bond discount amortization was recorded for $2,250 Issued preferred stock for cash $250,000 Sold a long-term stock investment with a book value of $79,000 for $123,000 cash Sold equipment with a book value of $90,000 for cash. The sale resulted in a $15,000 loss. Issued bonds with a maturity value of $2,000,000 in exchange for $1,950,000 cash Required: Determine the net cash flow from investing activities for 2018. Determine the net cash flow from financing activities for 2018.
Explanation / Answer
Answer:
Net cash flow from investing activities for 2018= $213,000
Net cash flow from financing activities for 2018=$50,000
Gopher company
Cash Flow
Amount $
Amount $
Cash Flow From investing activity
Sold a long-term stock investment
123,000
Sold equipment
90,000
Cash Flow From investing activity
213,000
Cash Flow From Financing activity
Cash dividend
-1,200,000
Payment of long term note payable
-900,000
Bond interest payment
-50,000
Issued preferred stock for cash
250,000
Issued bonds
1,950,000
Cash Flow From Financing activity
50,000
Notes:
1
Issued common stock in exchange for a building $750,000 is not a cash transaction so it will not shown in the cash flow statement
2
Bond discount amortization was recorded for $2,250 is not a cash transaction so it will not shown in the cash flow statement
Gopher company
Cash Flow
Amount $
Amount $
Cash Flow From investing activity
Sold a long-term stock investment
123,000
Sold equipment
90,000
Cash Flow From investing activity
213,000
Cash Flow From Financing activity
Cash dividend
-1,200,000
Payment of long term note payable
-900,000
Bond interest payment
-50,000
Issued preferred stock for cash
250,000
Issued bonds
1,950,000
Cash Flow From Financing activity
50,000
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