During 2017, Paxon Corporation’s long-term investments account (at cost) increas

Question

During 2017, Paxon Corporation’s long-term investments account (at cost) increased $15,000, which was the net result of purchasing stocks costing $80,000 and selling stocks costing $65,000 at a $6,000 loss. Also, its bonds payable account decreased $40,000, the net result of issuing $100,000 of bonds at $103,000 and retiring bonds with a face value (and book value) of $140,000 at a $9,000 gain.

What items and amounts appear in the (a) cash flows from investing activities and (b) cash flows from financing activities sections of its 2017 statement of cash flows?

Use negative signs with answers, when appropriate.

Cash flows from investing activities Purchase of stock investments $Answer Sale of stock investments $Answer Cash flows from financing activities Issuance of bonds $Answer Retirement of bonds $Answer

Explanation / Answer

the following is the required table:

note:

gain on retirement of bonds means that we paid $9000 lesser than what we ought to have paid.

stock sold at a loss implies that we received $6,000 less than the book value of $65,000.

Cash flows from investing activities Purchase of stock investments -$80,000 sale of stock investments ($65,000 - 6,000) $59,000 cash flow from financing activities issuance of bonds $103,000 retirement of bonds ($140,000 - $9,000 gain ) - $131,000

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