Reporting Issuance and Retirement of Long-Term Debt
On the basis of the details of the following bonds payable andrelated discount accounts, indicate the items to be reported in theFinancing Activities section of the statement of cash flows,assuming no gain or loss on retiring the bonds:
ACCOUNTBonds Payable ACCOUNTNO. Balance Date Item Debit Credit Debit Credit 2016 Jan. 1 Balance 300,000 Jan. 2 Retire bonds 60,000 240,000 June 30 Issue bonds 180,000 420,000
ACCOUNTDiscount on Bond Payable ACCOUNTNO. Balance Date Item Debit Credit Debit Credit 2016 Jan. 1 Balance 13,500 Jan. 2 Retire bonds 4,800 8,700 June 30 Issue bonds 12,100 20,800 Dec. 31 Amortize discount 1,040 19,760
Item Section of Statement of Cash Flows Added or Deducted Amount Retire bonds $ Issue bonds $ Amortization of discount $
Reporting Issuance and Retirement of Long-Term Debt
On the basis of the details of the following bonds payable andrelated discount accounts, indicate the items to be reported in theFinancing Activities section of the statement of cash flows,assuming no gain or loss on retiring the bonds:
| ACCOUNTBonds Payable | ACCOUNTNO. | |||||||||||
| Balance | ||||||||||||
| Date | Item | Debit | Credit | Debit | Credit | |||||||
| 2016 | ||||||||||||
| Jan. | 1 | Balance | 300,000 | |||||||||
| Jan. | 2 | Retire bonds | 60,000 | 240,000 | ||||||||
| June | 30 | Issue bonds | 180,000 | 420,000 | ||||||||
| ACCOUNTDiscount on Bond Payable | ACCOUNTNO. | |||||||||||
| Balance | ||||||||||||
| Date | Item | Debit | Credit | Debit | Credit | |||||||
| 2016 | ||||||||||||
| Jan. | 1 | Balance | 13,500 | |||||||||
| Jan. | 2 | Retire bonds | 4,800 | 8,700 | ||||||||
| June | 30 | Issue bonds | 12,100 | 20,800 | ||||||||
| Dec. | 31 | Amortize discount | 1,040 | 19,760 | ||||||||
| Item | Section of Statement of Cash Flows | Added or Deducted | Amount |
| Retire bonds | $ | ||
| Issue bonds | $ | ||
| Amortization of discount | $ |
Related questions
Statement of cash flowsâindirect method
Instructions
Labels and Amount Descriptions
Statement of Cash Flows
X
Instructions
The comparative balance sheet of Whitman Co. at December 31, 2016 and 2015, is as follows:
| 1 | Dec. 31, 2016 | Dec. 31, 2015 | |
| 2 | Assets | ||
| 3 | Cash | $918,000.00 | $964,640.00 |
| 4 | Accounts receivable (net) | â828,530.00 | 761,860.00 |
| 5 | Inventories | 1,267,840.00 | 1,162,650.00 |
| 6 | Prepaid expenses | 28,510.00 | 35,920.00 |
| 7 | Land | 316,660.00 | 480,600.00 |
| 8 | Buildings | 1,462,690.00 | 901,830.00 |
| 9 | Accumulated depreciation-buildings | (409,440.00) | (381,440.00) |
| 10 | Equipment | 513,200.00 | 454,090.00 |
| 11 | Accumulated depreciation-equipment | (141,800.00) | (158,860.00) |
| 12 | Total assets | $4,784,190.00 | $4,221,290.00 |
| 13 | Liabilities and Stockholdersâ Equity | ||
| 14 | Accounts payable (merchandise creditors) | $922,640.00 | $958,010.00 |
| 15 | Bonds payable | 271,000.00 | 0.00 |
| 16 | Common stock, $25 par | 307,000.00 | 117,000.00 |
| 17 | Paid-in capital: Excess of issue price over parâcommon stock | 754,600.00 | 557,000.00 |
| 18 | Retained earnings | 2,528,950.00 | 2,589,280.00 |
| 19 | Total liabilities and stockholdersâ equity | $4,784,190.00 | $4,221,290.00 |
The noncurrent asset, noncurrent liability, and stockholdersâ equity accounts for 2016 are as follows:
ACCOUNT Land
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 480,600 | |||
| Apr. | 20 | Realized $151,550 cash from sale | 163,940 | 316,660 |
ACCOUNT Buildings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 901,830 | |||
| Apr. | 20 | Acquired for cash | 560,860 | 1,462,690 |
ACCOUNT Accumulated DepreciationââBuildings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 381,440 | |||
| Dec. | 31 | Depreciation for year | 28,000 | 409,440 |
ACCOUNT Equipment
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 454,090 | |||
| 26 | Discarded, no salvage | 46,790 | 407,300 | |||
| Aug. | 11 | Purchased for cash | 105,900 | 513,200 |
ACCOUNT Accumulated Depreciation ââEquipment
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 158,860 | |||
| 26 | Equipment discarded | 46,790 | 112,070 | |||
| Dec. | 31 | Depreciation for year | 29,730 | 141,800 |
ACCOUNT Bonds Payable
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| May | 1 | Issued 20-year bonds | 271,000 | 271,000 |
ACCOUNT Common Stock $25 par
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 117,000 | |||
| Dec. | 7 | Issued 7,600 shares of common stock for $51 per share | 190,000 | 307,000 |
ACCOUNT Paid-In Capital in Excess of ParââCommon Stock
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 557,000 | |||
| Dec. | 7 | Issued 7,600 shares of common stock for $51 per share | 197,600 | 754,600 |
ACCOUNT Retained Earnings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 2,589,280 | |||
| Dec. | 31 | Net loss | 28,750 | 2,560,530 | ||
| 31 | Cash dividends | 31,580 | 2,528,950 |
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.
The comparative balance sheet of Whitman Co. at December 31, 2016 and 2015, is as follows:
| 1 | Dec. 31, 2016 | Dec. 31, 2015 | |
| 2 | Assets | ||
| 3 | Cash | $917,690.00 | $964,930.00 |
| 4 | Accounts receivable (net) | â828,620.00 | 762,860.00 |
| 5 | Inventories | 1,267,970.00 | 1,162,780.00 |
| 6 | Prepaid expenses | 29,050.00 | 36,010.00 |
| 7 | Land | 315,250.00 | 480,690.00 |
| 8 | Buildings | 1,462,990.00 | 901,470.00 |
| 9 | Accumulated depreciation-buildings | (409,170.00) | (382,690.00) |
| 10 | Equipment | 511,480.00 | 453,680.00 |
| 11 | Accumulated depreciation-equipment | (142,100.00) | (159,400.00) |
| 12 | Total assets | $4,781,780.00 | $4,220,330.00 |
| 13 | Liabilities and Stockholdersâ Equity | ||
| 14 | Accounts payable (merchandise creditors) | $923,380.00 | $958,540.00 |
| 15 | Bonds payable | 269,000.00 | 0.00 |
| 16 | Common stock, $25 par | 323,000.00 | 118,000.00 |
| 17 | Paid-in capital: Excess of issue price over parâcommon stock | 771,200.00 | 558,000.00 |
| 18 | Retained earnings | 2,495,200.00 | 2,585,790.00 |
| 19 | Total liabilities and stockholdersâ equity | $4,781,780.00 | $4,220,330.00 |
The noncurrent asset, noncurrent liability, and stockholdersâ equity accounts for 2016 are as follows:
ACCOUNT Land
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 480,690 | |||
| Apr. | 20 | Realized $153,400 cash from sale | 165,440 | 315,250 |
ACCOUNT Buildings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 901,470 | |||
| Apr. | 20 | Acquired for cash | 561,520 | 1,462,990 |
ACCOUNT Accumulated DepreciationââBuildings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 382,690 | |||
| Dec. | 31 | Depreciation for year | 26,480 | 409,170 |
ACCOUNT Equipment
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 453,680 | |||
| 26 | Discarded, no salvage | 46,270 | 407,410 | |||
| Aug. | 11 | Purchased for cash | 104,070 | 511,480 |
ACCOUNT Accumulated Depreciation ââEquipment
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 159,400 | |||
| 26 | Equipment discarded | 46,270 | 113,130 | |||
| Dec. | 31 | Depreciation for year | 28,970 | 142,100 |
ACCOUNT Bonds Payable
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| May | 1 | Issued 20-year bonds | 269,000 | 269,000 |
ACCOUNT Common Stock $25 par
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 118,000 | |||
| Dec. | 7 | Issued 8,200 shares of common stock for $51 per share | 205,000 | 323,000 |
ACCOUNT Paid-In Capital in Excess of ParââCommon Stock
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 558,000 | |||
| Dec. | 7 | Issued 8,200 shares of common stock for $51 per share | 213,200 | 771,200 |
ACCOUNT Retained Earnings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 2,585,790 | |||
| Dec. | 31 | Net loss | 58,980 | 2,526,810 | ||
| 31 | Cash dividends | 31,610 | 2,495,200 |
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.
The comparative balance sheet of Whitman Co. at December 31,2016 and 2015, is as follows:
1 | Dec. 31, 2016 | Dec. 31, 2015 | |
2 | Assets | ||
3 | Cash | $918,260.00 | $965,110.00 |
4 | Accounts receivable (net) | â828,050.00 | 761,830.00 |
5 | Inventories | 1,268,550.00 | 1,163,510.00 |
6 | Prepaid expenses | 28,760.00 | 35,720.00 |
7 | Land | 315,810.00 | 479,900.00 |
8 | Buildings | 1,463,300.00 | 900,740.00 |
9 | Accumulated depreciation-buildings | (408,350.00) | (381,910.00) |
10 | Equipment | 512,470.00 | 454,060.00 |
11 | Accumulated depreciation-equipment | (142,270.00) | (159,730.00) |
12 | Total assets | $4,784,580.00 | $4,219,230.00 |
13 | Liabilities and Stockholdersâ Equity | ||
14 | Accounts payable (merchandise creditors) | $922,360.00 | $957,810.00 |
15 | Bonds payable | 270,000.00 | 0.00 |
16 | Common stock, $25 par | 316,000.00 | 116,000.00 |
17 | Paid-in capital: Excess of issue price over parâcommon stock | 775,000.00 | 559,000.00 |
18 | Retained earnings | 2,501,220.00 | 2,586,420.00 |
19 | Total liabilities and stockholdersâ equity | $4,784,580.00 | $4,219,230.00 |
The noncurrent asset, noncurrent liability, and stockholdersâequity accounts for 2016 are as follows:
ACCOUNT Land
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 479,900 | |||
| Apr. | 20 | Realized $152,430 cash from sale | 164,090 | 315,810 |
ACCOUNT Buildings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 900,740 | |||
| Apr. | 20 | Acquired for cash | 562,560 | 1,463,300 |
ACCOUNT Accumulated DepreciationââBuildings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 381,910 | |||
| Dec. | 31 | Depreciation for year | 26,440 | 408,350 |
ACCOUNT Equipment
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 454,060 | |||
| 26 | Discarded, no salvage | 47,260 | 406,800 | |||
| Aug. | 11 | Purchased for cash | 105,670 | 512,470 |
ACCOUNT Accumulated Depreciation ââEquipment
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 159,730 | |||
| 26 | Equipment discarded | 47,260 | 112,470 | |||
| Dec. | 31 | Depreciation for year | 29,800 | 142,270 |
ACCOUNT Bonds Payable
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| May | 1 | Issued 20-year bonds | 270,000 | 270,000 |
ACCOUNT Common Stock $25 par
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 116,000 | |||
| Dec. | 7 | Issued 8,000 shares of common stock for $52 per share | 200,000 | 316,000 |
ACCOUNT Paid-In Capital in Excess of ParââCommonStock
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 559,000 | |||
| Dec. | 7 | Issued 8,000 shares of common stock for $52 per share | 216,000 | 775,000 |
ACCOUNT Retained Earnings
| ACCOUNT NO. | ||||||
| Balance | ||||||
| Date | Item | Debit | Credit | Debit | Credit | |
| 2016 | ||||||
| Jan. | 1 | Balance | 2,586,420 | |||
| Dec. | 31 | Net loss | 53,460 | 2,532,960 | ||
| 31 | Cash dividends | 31,740 | 2,501,220 |
Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Refer to theLabels and Amount Descriptions list provided for the exact wordingof the answer choices for text entries. Be sure to complete theheading of the statement. In the operating activities section, usethe minus sign to indicate cash outflows, decreases in cash and anet cash outflow, if required. In the investing and financingactivities section, use a minus sign only to indicate a NET cashoutflow for the section.
Labels and Amount Descriptions
| Labels andAmount Descriptions | |
|---|---|
| Cash paid for acquisition ofbuilding | |
| Cash paid for dividends | |
| Cash paid for merchandise | |
| Cash paid for purchase ofequipment | |
| Cash received from customers | |
| Cash received from issuance ofbonds payable | |
| Cash received from issuance ofcommon stock | |
| Cash received from land sold | |
| December 31, 2016 | |
| Decrease in accounts payable | |
| Decrease in accountsreceivable | |
| Decrease in cash | |
| Decrease in inventories | |
| Decrease in prepaid expenses | |
| Decrease in salaries payable | |
| Depreciation | |
| For the Year Ended December 31,2016 | |
| Gain on sale of investments | |
| Gain on sale of land | |
| Increase in accounts payable | |
| Increase in accountsreceivable | |
| Increase in cash | |
| Increase in inventories | |
| Increase in prepaid expenses | |
| Increase in salaries payable | |
| Issuance of common stock foracquisition of building | |
| Issuance of common stock forpurchase of equipment | |
| Issuance of common stock to retirebonds | |
| Loss on sale of investments | |
| Loss on sale of land | |
| Net cash flow from financingactivities | |
| Net cash flow from investingactivities | |
| Net cash flow from operatingactivities | |
| Net cash flow used for financingactivities | |
| Net cash flow used for investingactivities | |
| Net cash flow used for operatingactivities | |
| Net income | |
| Net loss |
Statement of Cash Flows
Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Refer to theLabels and Amount Descriptions list provided for the exact wordingof the answer choices for text entries. Be sure to complete theheading of the statement. In the operating activities section, usethe minus sign to indicate cash outflows, decreases in cash and anet cash outflow, if required. In the investing and financingactivities section, use a minus sign only to indicate a NET cashoutflow for the section.
Whitman Co. |
Statement of Cash Flows |
1 | Cash flows from operating activities: | |||
2 | ||||
3 | Adjustments to reconcile net loss to net cash flow fromoperating activities: | |||
4 | ||||
5 | ||||
6 | Changes in current operating assets and liabilities: | |||
7 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
12 | ||||
13 | Cash flows from investing activities: | |||
14 | ||||
15 | ||||
16 | ||||
17 | ||||
18 | ||||
19 | Cash flows from financing activities: | |||
20 | ||||
21 | ||||
22 | ||||
23 | ||||
24 | ||||
25 | Cash at the beginning of the year | |||
26 | Cash at the end of the year |
