Question

(a) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and new equipment was purchased for $183,200. (b) Bonds payable for $100,000 were retired by payment at their face amount. (c) 5,000 shares of common stock were issued at $13 for cash. (d) Cash dividends declared and paid, $25,000. Prepare a statement of cash flow, using the indirect method of reporting cash flows from operating activities

Answer 1

Answer:

Statement of cashflow

Operating Activities

(a) Loss on  equipment disposed      60,000

Investing Activities

(a) Acquisition on new equipment      (183,200)

Financing activities

(b) Retirement of bond payable           (100,000)

(c ) Issue of new common stock share  65,000

(d) Dividend paid                                     (25,000)

Explanation: