In preparation for developing its statement of cash flows for the year just ende
ID: 2557603 • Letter: I
Question
In preparation for developing its statement of cash flows for the year just ended, Schmidt Distributors collected the following information: ($ in millions)
Purchase of treasury bills (considered a cash equivalent) 6
Sale of preferred stock 150
Gain on sale of land 4
Proceeds from sale of land 25 I
ssuance of bonds payable for cash 140
Purchase of equipment for cash 30
Purchase of GE stock 35
Declaration of cash dividends 134
Payment of cash dividends declared in previous year 130
Purchase of treasury stock 120
Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) 110
1. In good form, prepare the investing activities section of Schmidt’s cash flow statement.
2. In good form, prepare the financing activities section of Schmidt’s cash flow statement.
Explanation / Answer
1)
2)
cash flow from investing activity Proceeds from sale of land 25 Purchase of equipment for cash (30) Purchase of GE stock (35) Cash flow from investing activity (40)