Chapter 23, Problem 2E

To determine

Introduction: Cash flow statement provides information about the cash inflows and outflows during a given period of time.

(a) To determine: To determine whether the below entry would be recorded in statement of cash flow. Then how and also where in the cash flow they would be recorded.

Given Information:

• Cost of plant: $20,000
• Straight-line depreciation followed
• No scrap value at end of life

To determine

(b) To determine: To determine where to record issuance of common stock.

To determine

(c) To determine: To determine whether debts affects the cash flow statement.

To determine

(d) To compute: To compute cash flows (Financing and Operating activities).

Given Information:

• Net loss: $50,000
• Depreciation: $22,000
• Gain realized: $9,000
• Sale of land: $39,000

To determine

(e) To determine: To determine whether the bill is included in the statement.

Given Information: Treasury bill purchased: $100,000.

To determine

(f) To determine: To determine whether to add plant amortization.

Given Information: Patent amortization: $20,000.

To determine

(g) To determine: To determine where will the given entry be shown.

Given Information: Common stock for exchanged for 70% interest in T Co. for $900,000.

To determine

(h) To determine: To determine where will the given entry be shown.

Given Information: Purchased treasury stock costing $47,000.