The following selected account balances were taken from Buckeye Company\'s gener
ID: 2364515 • Letter: T
Question
The following selected account balances were taken from Buckeye Company's general ledger at January 1, 2008 and December 31, 2008:January 1, 2008 December 31, 2008
Inventory 59,000 41,000
Accounts payable 52,000 71,000
Mortgage payable 120,000 95,000
Salaries payable 9,000 3,000
Investments 75,000 68,000
Accounts receivable 63,000 96,000
Land 58,000 88,000
Common stock 100,000 180,000
Retained earnings 22,000 34,000
The following information was taken from Buckeye Company's 2008 income statement:
Sales revenue $420,000
Cost of goods sold 300,000
Salaries expense 88,000
Loss on sale of investments 6,000
Net income $ 26,000
Calculate the net cash flow from financing activities for 2008. If your answer is negative, place a minus sign in front of your answer with no spaces in between (e.g., -1234). Do not use decimals in your answer.
Explanation / Answer
Note: I treated mortagage payble as long term loan, and I assumed that Loss on sale of investments are not deducted in income statement, that's why I deducted from retained earnings. Cash flow from Financing Activities:Cash from Common stock issue (180000 - 100000)
80000
Less:
Mortagage payble(120000 - 95000) 25000
Dividend paid 8000
Total cash payments of financing activities:
33000 Net Cash Flow From Financing Activities:(80000 - 33000)
$47,000 Cash flow from Financing Activities: Cash from Common stock issue (180000 - 100000) 80000 Less: Mortagage payble(120000 - 95000) 25000 Dividend paid 8000 Total cash payments of financing activities: 33000 Net Cash Flow From Financing Activities:(80000 - 33000) $47,000
Working: Cash flow from Financing Activities:
Cash from Common stock issue (180000 - 100000)
80000
Less:
Mortagage payble(120000 - 95000) 25000
Dividend paid 8000
Total cash payments of financing activities:
33000 Net Cash Flow From Financing Activities:(80000 - 33000)
$47,000