Exercise 12-1 Warning Don\'t show me this message again for the assignment Ok Ca
ID: 2444944 • Letter: E
Question
Exercise 12-1
Warning
Don't show me this message again for the assignment
Ok
Cancel
Link to Text
Exercise 12-1
Putnam Corporation had these transactions during 2014.Analyze the transactions and indicate whether each transaction resulted in a cash flow from operating activities, investing activities, financing activities, or noncash investing and financing activities.
(a) Purchased a machine for $30,000, giving a long-term note in exchange. Noncash Investing and Financing ActivitiesInvesting ActivitiesFinancing ActivitiesOperating Activities (b) Issued $50,000 par value common stock for cash. Financing ActivitiesInvesting ActivitiesOperating ActivitiesNoncash Investing and Financing Activities (c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. Operating ActivitiesNoncash Investing and Financing ActivitiesInvesting ActivitiesFinancing Activities (d) Declared and paid a cash dividend of $13,000. Investing ActivitiesFinancing ActivitiesOperating ActivitiesNoncash Investing and Financing Activities (e) Sold a long-term investment with a cost of $15,000 for $15,000 cash. Operating ActivitiesInvesting ActivitiesNoncash Investing and Financing ActivitiesFinancing Activities (f) Collected $16,000 of accounts receivable. Investing ActivitiesOperating ActivitiesNoncash Investing and Financing ActivitiesFinancing Activities (g) Paid $18,000 on accounts payable. Operating ActivitiesNoncash Investing and Financing ActivitiesFinancing ActivitiesInvesting Activities
Warning
Don't show me this message again for the assignment
Ok
Cancel
Link to Text
Explanation / Answer
(a) Non-cash investing and financing.
Even though an asset has been purchased (investing activity), payment is not made in cash, instead in terms of long term bonds (which is a financing activity).
(b) Financing activity
Issuance of common stock for cash raises capital for the firm, which is a cash financing activity.
(c) Non-cash investing and financing activity
Common stock has been issued (financing activity) but not in exchange of cash, but by conversion of bonds, which is another financing activity.
(d) Financing activity
Cash payment of dividend is a financing activity.
(e) Investing activity
Selling a long term investment for cash is an investment (sale of investment) activity.
(f) Operating activity
Cash collected from customers is an operating activity.
(g) Operating activity
Cash paid to suppliers is an operative activity.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.