In preparation for developing its statement of cash flows for the year ended Dec
ID: 2591184 • Letter: I
Question
In preparation for developing its statement of cash flows for the year ended December 31, 2016, Rapid Pac, Inc., collected the following information S 56.0 Fair value of shares issued in a stock dividend Payment for the early extinguishment of long-term bonds (book value: $78.0 million) Proceeds from the sale of treasury stock (cost: $14.0 million) Gain on sale of land Proceeds from sale of land Purchase of Microsoft common stock Declaration of cash dividends Distribution of cash dividends declared in 2015 83.0 19.0 2.3 6.9 136.0 48.0 44.0 Required 1. In Rapid Pac's statement of cash flows, what were net cash inflows (or outflows) from investing activities for 2016? (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Cash Flows From Investing Activities: Net cash inflows (outflows) from investing activities 2. In Rapid Pac's statement of cash flows, what were net cash inflows (or outflows) from financing activities for 2016? (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). in Cash Flows from Financing Activities Net cash inflows (outflows) from financing activitiesExplanation / Answer
Solution: 1. Net cash inflows (or outflows) from investing activities for 2016 $ in millions Cash Flows From Investing Activities Proceeds from sale of land 6.90 Purchase of Microsoft common stock -136 Net cash inflows (or outflows) from investing activities -129.10 2. $ in millions Cash Flows from Financing Activities: Payment for the early extinguishment of long-term bonds -83.00 Distribution of cash dividends declared in 2015 -44.00 Proceeds from the sale of treasury stock 19 Net cash inflows (outflows) from financing activities -108.00 Notes: Declaration of cash dividends do not shows any change in cash flows Gain on sale of land is item of operating activities not investing as it has effect on net income Fair value of share issued under stock dividends do not change any cash flows. Please feel free to ask if anything about above solution in comment section of the question.