Hagag Company uses the indirect method to prepare its statement of cash flows. Please refer to the following sections of the company’s comparative balance sheet and complete the fourth column to show the increase or decrease for each item listed. Please use the correct sign for each item to gain the full mark assigned (for example if the figure is negative, this must be clearly stated with brackets or with the minus sign):
|
2014 |
2013 |
Increase/decrease |
|
|
Accounts payable |
$ 4,000 |
$ 6,000 |
|
|
Accrued liabilities |
2,000 |
1,000 |
|
|
Long-term notes payable |
84,000 |
90,000 |
|
|
Total liabilities |
$ 90,000 |
$ 97,000 |
|
|
Common stock |
30,000 |
2,000 |
|
|
Retained earnings |
113,000 |
74,000 |
|
|
Treasury stock |
(8,000) |
(5,000) |
|
|
Total equity |
$135,000 |
$ 71,000 |
|
|
Total liabilities and equity |
$225,000 |
$168,000 |
The company also provided the following additional information:
•No stock was retired.
•No treasury stock was sold.
•During 2014, the company repaid $40,000 of long-term notes payable.
•During 2014, the company borrowed $34,000 on a new note payable.
•Net income for the year was $49,000.
From the info presented above, prepare the financing section of the statement of cash flows using the following format:
|
Financing activities: |
||
|
Issuance of stock |
||
|
Purchase of treasury stock |
||
|
Sale of treasury stock |
||
|
Borrowing on notes payable |
||
|
Repayments of notes payable |
||
|
Payment of dividends |
||
|
Net cash from financing activities |
| Cash flow from financing activities | ||
| Issuance of stock [30000-2000] | $ 28,000 | |
| Purchase of treasury stock | $ -3,000 | |
| Sale of treasury stock | $ - | |
| Borrowing on notes payable | $ 34,000 | |
| Repayment of notes payable | $ -40,000 | |
| Payment of dividends (74000+49000-113000) | $ -10,000 | |
| Net cash from financing activities | $ 9,000 |
Get Answers For Free
Most questions answered within 1 hours.