Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.
Non-Cash Transaction:
The transaction, which does not involve any cash dealings, is known as non-cash transactions. In these type transactions there will not be any inflow or outflow of cash. Simply put, the transaction, which does not have an impact on the inflow or outflow of cash, is called as non-cash transactions.
Examples of significant non-cash transactions are stated below:
- Issue of common stock to retire long-term debt.
- Purchase of machinery by issuing notes payable
- Issuance of common stock for purchase of land
To Identify: The non-cash transactions that occurred during the year.
To Report: The non-cash investing and financing transitions.
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Horngren's Financial & Managerial Accounting, The Financial Chapters, Student Value Edition (5th Edition)
- On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: ww www Minor Company Balance Sheet wwww n n Assets Liabilities and Owners' Equity $40,000 $55,000 280,000 $335,000 Cash Notes Payable Capital Acc. Receivable 80,000 Inventory Buildings(net) Equipment(net) Patents Trademarks 120,000 50,000 30,000 5,000 10,000 $335,000 ww An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp. ww warrow_forwardSaverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of 66,747,178. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 2017, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for 2016.arrow_forwardIZZY Company recorded the following transactions for the year 2018: Collection of accounts recervable Purchases of patent for cash Dividends paid Acquisiton of South Company ordinary shares for cansh Sale of investment securities for cash 3,900,000 1,125,000 1,125,000 2,625,000 2,250,000 Issuance of P3,750,000 face value bonds for cash Payment of accounts payable Acquisition of land through the issuance of 30,000 ordinary shares, par P100 Dividends received Payment of bank loan 3,900,000 1,875,000 3,600,000 900,000 1,500,000 Additional information: 1. The net income for the period amounted to P4,875,000. 2. The cash paid for the shares acquired from South Company was barrowed from Partner Commercial Bank. Required: Compute the following: 1. Net cash provided by financing activities 2. Net cash used by investing activitiesarrow_forward
- Moore Company is preparing its statement of cash flows for the current year. During the year, the company retired two issuances of debt and properly recorded the transactions. These transactions were as follows: Paid cash of $12,700 to retire bonds payable with a face value of $15,000 and a book value of $13,300. Paid cash of $48,000 to retire bonds payable with a face value of $45,000 and a book value of $47,000. Required: Record, in journal entry form, the entries that Moore would make for the preceding transactions on its spreadsheet to prepare its statement of cash flows. If an amount box does not require an entry, leave it blank.arrow_forwardMazaya Company repurchased its own shares (treasury shares) with a cost of R.O 15,000 during 2011. During the year, the company declared dividends of R.O 20,000 and issued bonds payable for proceeds of R.O.866,000. Cash flows from financing activities for 2011 total Select one a. RO.851,000 net cash infloW. O bRO 886,000 net cash inflow c RO.866,00o net cash outflow. d. R.O.861,00o net cash inflowarrow_forwardRetirement of Debt M Company is preparing its statement of cash flows for the current year. During the year, the company retired two issuances of debt and properly recorded the transactions. These transactions were as follows: Paid cash of $16,400 to retire bonds payable with a face value of $18,000 and a book value of $16,800. Paid cash of $46,000 to retire bonds payable with a face value of $43,000 and a book value of $45,000. Required: Record, in journal entry form, the entries that M would make for the preceding transactions on its spreadsheet to prepare its statement of cash flows. If an amount box does not require an entry, leave it blank. DESCRIPTION DOC. NO. POST. REF. DEBIT CREDIT (1) fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Cash Flows from Financing Activities: fill in the blank 8 fill in the blank 9 Net Cash Flow from Operating Activities:…arrow_forward
- Anna Maria Island Co. provided the following information on selected transactions during 2017: Purchase of land by issuing bonds $1,550,000 Proceeds from sale of land 925,000 Proceeds from issuing bonds 1,900,000 Purchases of inventory 2,975,000 Purchases of treasury stock 190,000 Loans made to affiliated corporations 525,000 Dividends paid to preferred stockholders 120,000 Proceeds from issuing preferred stock 325,000 Proceeds from sale of equipment 650,000 The net cash provided by financing activities during 2017 is $1,725,000. $2,465,000. $2,040,000. $1,915,000.arrow_forwardMinibikes, Inc. identified the following selected transactions that occurred during the year ended December 31, 2024 Identify any non-cash transactions that occurred during the year, and show how they would be reported in the non-cash investing and financing activities section of the statement of cash flows. a. Issued 900 shares of $4 par common stock for cash of $24,000. b. Issued 5,300 shares of $4 par common stock for a building with a fair market value of $95,000. c. Purchased new truck with a fair market value of $33,000.Financed it 100% with a long-term note. d. Retired short-term notes of $24,000 by issuing 2,500 shares of $4 par common stock. e. Paid long-term note of $12,000 to Bank of Tallahassee. Issued new long-term note of $22,000 to Bank of Trustarrow_forwardIn 2017, Leppard Inc. issued 1,000 shares of $10 par value common stock for land worth $40,000.(a) Prepare Leppard’s journal entry to record the transaction.(b) Indicate the effect the transaction has on cash.(c) Indicate how the transaction is reported on the statement of cash flows.arrow_forward
- Torche CorporationBalance SheetAs of January 24, 2022(amounts in thousands) Cash 14,700 Accounts Payable 2,400 Accounts Receivable 4,800 Debt 3,700 Inventory 3,800 Other Liabilities 5,000 Property Plant & Equipment 15,800 Total Liabilities 11,100 Other Assets 900 Paid-In Capital 6,000 Retained Earnings 22,900 Total Equity 28,900 Total Assets 40,000 Total Liabilities & Equity 40,000 Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question. Jan 25. Sell product for $35,000 in cash with historical cost of $28,000Jan 26. Sell, deliver, and receive payment of $20,000 for serviceJan 27. Consume good or service and pay expense of $3,000 What is the final amount in Total Liabilities & Equity?arrow_forwardIn 2018, Jubilee Company repurchased its own stock at a cost of $55,000. During theyear, the company purchased land with cash for $120,000 and issued bonds payable for$500,000. Net cash provided by financing activities for the year would have beena. $675,000.b. $325,000.c. $445,000.d. $555,000.arrow_forwardAdobe Incorporated reported the following accounts and amounts (in millions) in its financial statements for the year ended November 30, 2018. Accounts Payable Accounts Receivable Accumulated Amortization Accumulated Depreciation $ 1,350 1,330 650 1,400 Allowance for Doubtful Accounts 15 Cash and Cash Equivalents 1,640 Common Stock 450 Deferred Revenue 2,915 Equipment 13,060 Income Taxes Payable 35 Notes Payable (long-term) 5,105 Notes Receivable (long-term) 185 Prepaid Rent 310 Retained Earnings 8,915 Service Revenue 485 Short-Term Investments 1,590 2,720 Software Required: Prepare a classified balance sheet. The Allowance for Doubtful Accounts relates entirely to Accounts Receivable. (One of the accounts does not belong on the balance sheet.) (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Answer is not complete. ADOBE INCORPORATED Balance Sheet As of November 30, 2018 (in millions of dollars) Assets Current Assets Cash and Cash Equivalents Accounts…arrow_forward
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning