Question

An analysis of the Marketable Securities control account of Fancher Products, Inc., shows the following entries...

An analysis of the Marketable Securities control account of Fancher Products, Inc., shows the following entries during the year.

Balance, Jan. 1

$

280,000

Debit entries

290,000

Credit entries

(150,000

)

Balance, Dec. 31

$

420,000

In addition, the company’s income statement includes a $35,000 loss on sales of marketable securities. None of the company’s marketable securities is considered a cash equivalent.

Compute the amounts that should appear in the statement of cash flows as:

Purchase of marketable securities ______

Proceeds from sales of marketable securities _______

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Answer #1

1

Purchase of marketable securities =$290,000

Explanation:

As it was given in the question Debit entries of $290,000 and debit entries means purchase of security so in the statement of cash flows as Purchase of marketable securities =$290,000

_______________________________

2

Proceeds from sales of marketable securities =$115,000.

Explanation:

Book value

150,000

Less: loss on sales of marketable securities

35,000

net cash flow from Sale of marketable securities

115,000

____________________________________________

Purchase of marketable securities =$290,000

Proceeds from sales of marketable securities =$115,000.

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