Determining Cash Flows from Financing Activities Solomon Construction Company re

Question

Determining Cash Flows from Financing Activities

Solomon Construction Company reported the following amount on its balance sheet at the end of 2013 and 2012 for notes payable:

Required:

1. If Solomon did not repay any notes payable during 2013, determine how much cash Solomon received from the issuance of notes payable.
$

2. If Solomon repaid $40,000 of notes payable during 2013, determine what amounts Solomon would report in the financing activities section of the statement of cash flows.

Explanation / Answer

1) Cash received by solomon from the issuance of notes payable = 200000-120000 i.e 80000

2) If solomon repaid 40000 of notes payable during 2013

Payment of notes payable = 40000

Issuance of notes payble = 200000-(120000-40000) i.e 120000

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