On the basis of the following stockholders’ equity accounts, indicate the items, exclusive of net income ACCOUNT Common Stock

On the basis of the following stockholders’ equity accounts, indicate the items, exclusive of net income, to be reported on the statement of cash flows. There were no unpaid dividends at either the beginning or the end of the year.




ACCOUNT Common Stock, $50 par ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance, 150,000 shares
37,500 shares issued for cash
5,500-share stock dividend
1
7
30
Jan.
Mar.
June
7,500,000
9,375,000
9,650,000
1,875,000
275,000
ACCOUNT Paid-In Capital in Excess of Par––Common Stock ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
37,500 shares issued for cash
Stock dividend
1
7
30
Jan.
Mar.
June
500,000
3,500,000
3,995,000
ACCOUNT Retained Earnings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Stock dividend
Cash dividend
Net income
1
30
30
31
Jan.
June
Dec.
2,500,000
1,730,000
1,006,250
1,800,000 2,806,250


Answer:

Cash flows from financing activities:
Cash received from sale of common stock……………………………………… $4,875,000
Less: Cash paid for dividends……………………………………………………… 723,750
Note: The stock dividend is not disclosed on the statement of cash flows.





On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:


ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Purchased for cash
Purchased with long-term
 mortgage note
1
10
20
Jan.
Feb.
Nov.
156,000
402,000
726,000


Answer:

Cash flows from investing activities:
Cash paid for purchase of land………………………………………………………… $246,000
A separate schedule of noncash investing and financing activities would report
the purchase of $324,000 land with a long-term mortgage note, as follows:
Purchase of land by issuing long-term mortgage note……………………………… $324,000