Question

Sale of preferred stock: $ 150 million Gain on sale of land: 4 million Proceeds from...

Sale of preferred stock: $ 150 million
Gain on sale of land: 4 million
Proceeds from sale of land: 25 million
Issuance of bonds payable for cash: 140 million
Purchase of equipment for cash: 30 million
Purchase of GE stock: 35 million
Declaration of cash dividends: 134 million
Payment of cash dividends declared in previous year: 130 million
Purchase of treasury stock: 120 million
Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million): 110 million
a) prepare investing activities sction of cash flow statement using indirect method
b) prepare the financing activites of cash flow statement using indirect method

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Answer #1

a) prepare investing activities sction of cash flow statement using indirect method

Proceeds from sale of land 25
Purchase of equipment for cash (30)
Purchase of equipment for cash (35)
Net cash flow from operating activities (40)

b) prepare the financing activites of cash flow statement using indirect method

Sale of preferred stock 150
Issuance of bonds payable for cash 140
Payment of cash dividends declared in previous year (130)
Purchase of treasury stock (120)
Payment for the early extinguishment of long-term notes (110)
Net cash flow from financing activities (70)
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