An analysis of the Marketable Securities control account of Fancher Products, In
ID: 2398941 • Letter: A
Question
An analysis of the Marketable Securities control account of Fancher Products, Inc., shows the following entries during the year.
Balance, Jan. 1
$
280,000
Debit entries
290,000
Credit entries
(150,000
)
Balance, Dec. 31
$
420,000
In addition, the company’s income statement includes a $35,000 loss on sales of marketable securities. None of the company’s marketable securities is considered a cash equivalent.
Compute the amounts that should appear in the statement of cash flows as:
Purchase of marketable securities ______
Proceeds from sales of marketable securities _______
Balance, Jan. 1
$
280,000
Debit entries
290,000
Credit entries
(150,000
)
Balance, Dec. 31
$
420,000
Explanation / Answer
Answer:
1
Purchase of marketable securities =$290,000
Explanation:
As it was given in the question Debit entries of $290,000 and debit entries means purchase of security so in the statement of cash flows as Purchase of marketable securities =$290,000
_______________________________
2
Proceeds from sales of marketable securities =$115,000.
Explanation:
Book value
150,000
Less: loss on sales of marketable securities
35,000
net cash flow from Sale of marketable securities
115,000
____________________________________________
Purchase of marketable securities =$290,000
Proceeds from sales of marketable securities =$115,000.
Book value
150,000
Less: loss on sales of marketable securities
35,000
net cash flow from Sale of marketable securities
115,000
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