Question

Following are selected balance sheet accounts of Carla Bros. Corp. at December 31, 2017 and 2016, and the increases or decreases in each account from 2016 to 2017. Also presented is selected income statement information for the year ended December 31, 2017, and additional information.

Selected balance sheet accounts

Assets	2017	2016	Increase (Decrease)
Accounts receivable	$33,700	$24,000	$9,700
Property, plant, and equipment	276,400	249,500	26,900
Accumulated depreciation—plant assets	(178,400)	(167,300)	(11,100)

  

Liabilities and stockholders’ equity	2017	2016	Increase
Bonds Payable	$48,800	$45,800	3,000
Dividends Payable	7,900	4,900	3,000
Common Stock, $1 par	22,200	19,200	3,000
Additional paid-in capital	9,100	3,000	6,100
Retained earnings	103,400	90,300	13,100

Selected income statement information for the year ended December 31, 2017:

Sales revenue	$154,500
Depreciation	38,100
Gain on sale of equipment	14,600
Net income	30,900

Additional information:

1. During 2017, equipment costing $44,700 was sold for cash.

2. Accounts receivable relate to sales of merchandise.

3. During 2017, $20,200 of bonds payable were issued in exchange for property, plant, and equipment. There was no amortization of bond discount or premium.

Determine the category (operating, investing, or financing) and the amount that should be reported in the statement of cash flows for the following items.

	Activity
(a) Payments for purchase of property, plant, and equipment.	INVESTING	$
(b) Proceeds from the sale of equipment.	INVESTING	$32,300
(c) Cash dividends paid.	FINANCING	$
(d) Redemption of bonds payable.	FINANCING	$17,200

Answer 1

Determine the category (operating, investing, or financing) and the amount that should be reported in the statement of cash flows for the following items.

(a) Payments for purchase of property, plant, and equipment. (249500-44700-276400-20200)	Investing	$51400
(b) Proceeds from the sale of equipment. (44700-27000+14600)	Investing	$32300
(c) Cash dividends paid. (90300+30900-103400+4900-7900)	Financing	$14800
(d) Redemption of bonds payable. (45800+20200-48800)	Financing	$17200