Chapter 15, Problem 2E

Effect of transactions on cash flows

State the effect (cash receipt or cash payment and amount) of each of the following transactions, considered individually, on cash flows:

1. a. Retired $500,000 of bonds, on which there was $4,000 of unamortized discount, for $510,000.
2. b. Sold 20,000 shares of $5 par common stock for $30 per share.
3. c. Sold equipment with a book value of $68,900 for $72,400.
4. d. Purchased land for $825,000 cash.
5. e. Purchased a building by paying $30,000 cash and issuing a $570,000 mortgage note payable.
6. f. Sold a new issue of $400,000 of bonds at 98.
7. g. Purchased 10,000 shares of $10 par common stock as treasury stock at $22.50 per share.
8. h. Paid dividends of $1.25 per share. There were 1,000,000 shares issued and 180,000 shares of treasury stock.