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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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During the current year, Ross Corporation purchased a warehouse for $45,000, paid $1,000 dividends, sold land for $7,900, and issued $25,000 of common stock. All of these were cash transactions. Show how Ross would report the cash provided by (or used for) its investing and financing activities sections of its statement of cash flows for the current year.

To determine

Describe the manner in which the company would report its cash provided by investing and financing activities sections of the statement of cash flows for the current year.

Explanation

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities. Operating activities include cash inflows and outflows from business operations. Investing activities includes cash inflows and cash outflows from purchase and sale of land or equipment, or investments. Financing activities includes cash inflows and outflows from issuance of common stock and debt, payment of debt and dividends.

Describe the manner in which the company would report its cash provided by investing and financing activities sections of the statement of cash flows for the current year:

Company R
Statement of Cash Flows (Partial)

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