INTERMEDIATE ACCOUNTING V1 330 6/16 >C
8th Edition
ISBN: 9781260014853
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 21, Problem 21.14E
Identifying cash flows from investing activities and financing activities
• LO21–5, LO21–6
In preparation for developing its statement of cash flows for the year ended December 31, 2018, Millennium Solutions, Inc. collected the following information:
| ($ in millions) | |
| Payment for the early extinguishments of long-term notes (book value: $50 million) | $ 54 |
| Sale of common shares | 176 |
| Retirement of common shares | 122 |
| Loss on sale of equipment | 2 |
| Proceeds from sale of equipment | 8 |
| Issuance of short-term note payable for cash | 10 |
| Acquisition of building for cash | 7 |
| Purchase of marketable securities (not a cash equivalent) | 5 |
| Purchase of marketable securities (considered a cash equivalent) | 1 |
| Cash payment for 3-year insurance policy | 3 |
| Collection of note receivable with interest (principal amount, $11) | 13 |
| Declaration of cash dividends | 33 |
| Distribution of cash dividends declared in 2017 | 30 |
Required:
- 1. In Millennium’s statement of cash flows, what were net
cash inflows (or outflows) from investing activities for 2018? - 2. In Millennium’s statement of cash flows, what were net cash inflows (or outflows) from financing activities for 2018?
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Problem 21-16 (Algo) Statement of cash flows; indirect method [LO21-4, 21-8]
The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
DUX COMPANYComparative Balance SheetsDecember 31, 2021 and 2020($ in thousands)
2021
2020
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Cash
$
117.0
$
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Accounts receivable
62.0
64.0
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Dividends receivable
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16.0
Inventory
69.0
64.0
Long-term investment
29.0
24.0
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40.0
Buildings and equipment
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264.0
Less: Accumulated depreciation
(7.0
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(120.0
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$
537.0
$
384.0
Liabilities
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$
27.0
$
34.0
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16.0
19.0
Interest payable
18.0
16.0
Income tax payable…
Additional short-term borrowings
Purchase of short-term stock investments
Cash dividends paid
Interest paid
$ 20,000
5,000
16,000
8,e00
Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by
a minus sign.)
Financing Activities
$
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3/27/2022
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Problem 21-17 (Algo) Statement of cash flows; indirect method [LO21-4, 21-8]
Comparative balance sheets for 2021 and 2020 and a statement of income for 2021 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided.
METAGROBOLIZE INDUSTRIESComparative Balance SheetsDecember 31, 2021 and 2020($ in thousands)
2021
2020
Assets
Cash
$
405
$
245
Accounts receivable
350
190
Inventory
500
275
Land
500
450
Building
900
900
Less: Accumulated depreciation
(200
)
(180
)
Equipment
2,500
2,150
Less: Accumulated depreciation
(325
)
(300
)
Patent
1,000
1,150
$
5,630
$
4,880
Liabilities
Accounts payable
$
600
$
400
Accrued liabilities
150
130
Lease liability—land
130
0
Shareholders' Equity
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Chapter 21 Solutions
INTERMEDIATE ACCOUNTING V1 330 6/16 >C
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