Checker’s Games Co. reported the following items on its comparative balance shee

Question

Checker’s Games Co. reported the following items on its comparative balance sheet for 2008: 2008 2007 Accounts payable $200,000 $175,000 Dividends payable 10,000 0 Notes payable 280,000 240,000 Common stock 315,000 290,000 Additional paid-in capital 120,000 100,000 Land 175,000 150,000 Goodwill 45,000 75,000 Additional information for 2008: 1. A $70,000 note payable was issued for cash.

2. Interest expense totaled $15,000 for the year of which $13,500 was paid in cash.

3. Stock was issued for cash (the transaction involved common stock).

4. A note payable for $30,000 was repaid. 5. Dividends of $50,000 were declared of which $40,000 have been paid. Required: Prepare the financing section of the cash flow statement in good form for Checker’s Games Co.

Explanation / Answer

Cash Flow from Financing Activity: Amount($) Issuance of Stock (435,000-390,000) 45000 Issuance of Notes 70000 Repayment of Notes payable -30000 Dividend Paid -40000 Cash Flow from Financing Activity 45000

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