he following selected account balances were taken from Buckeye Company\'s genera

Question

 he following selected account balances were taken from Buckeye Company's general ledger at
January 1, 2008 and December 31, 2008:                    January 1, 2008       December 31, 2008    Inventory              59,000                41,000   Accounts payable       52,000                71,000   Mortgage payable      120,000                95,000   Salaries payable        9,000                 3,000   Investments            75,000                68,000   Accounts receivable    63,000                96,000   Land                   58,000                88,000   Common stock          100,000               180,000   Retained earnings      22,000                34,000  The following information was taken from Buckeye Company's 2008 income statement:    Sales revenue                   $420,000   Cost of goods sold               300,000   Salaries expense                  88,000   Loss on sale of investments        6,000   Net income                      $ 26,000  Calculate the net cash flow from financing activities for 2008. If your answer is negative,
place a minus sign in front of your answer with no spaces in between (e.g., -1234). Do not
use decimals in your answer. 

Explanation / Answer

Note: I treated mortagage payble as long term loan, and I assumed that Loss on sale of investments are not deducted in income statement, that's why I deducted from retained earnings. Cash flow from Financing Activities:

Cash from Common stock issue (180000 - 100000)
80000


Less:

Mortagage payble(120000 - 95000) 25000
Dividend paid 8000
Total cash payments of financing activities:
33000 Net Cash Flow From Financing Activities:(80000 - 33000)
$47,000 Cash flow from Financing Activities: Cash from Common stock issue (180000 - 100000) 80000 Less: Mortagage payble(120000 - 95000) 25000 Dividend paid 8000 Total cash payments of financing activities: 33000 Net Cash Flow From Financing Activities:(80000 - 33000) $47,000
Working: Cash flow from Financing Activities:

Cash from Common stock issue (180000 - 100000)
80000


Less:

Mortagage payble(120000 - 95000) 25000
Dividend paid 8000
Total cash payments of financing activities:
33000 Net Cash Flow From Financing Activities:(80000 - 33000)
$47,000

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