Accounting questions?

Accounting questions?
The following events occurred during an accounting period:

Machinery was purchased for $4,500 cash.
$10,000 was borrowed on a long-term note.
1,000 shares of $5 par value common stock were issued for cash, at par.
Cash dividends of $2,000 were declared and paid.
An investment in another business was sold for $23,000.
$50,000 in bonds was retired at maturity.
A plant asset with a book value of $4,500 was sold for $4,500.
What were the net cash flows from financing activities?



a. $14,000, decrease
b. $37,000, decrease
c. $23,000, increase
d. $14,000, increase
e. None of the above

When a long-term asset is sold for cash at a price in excess of its book value, the sale should be reported as an inflow of cash from an investing activity equal to which of the following?

a. Selling price (proceeds)
b. Book value
c. Selling price less the amount of the gain
d. Selling price plus the amount of the gain
e. Accumulated depreciation


Answers:

double-edged-star:  a. $14 K decrease in cash.
Part 2. The accounting entry would be something like (numbers made up):
Cash Dr. 5000
Accumulated depreciation Dr. 3500
Asset Cr. 6500
Profit from sale of asset Cr. 2000
2007-05-18 13:00:00
blinks_cutie_2003:  a and a

(4500)+10,000+5000+(2000)+23,000+(50,000)+4500 = (14,000)
2007-05-18 13:06:10
Chosen Answer
megawampum:  Question 1: B 37,000 decrease. The question is, what are the net cash flows from FINANCING activies. There are 4 of these activities.

Issue long-term note = +10,000
Issue Common Stock = +5,000
Cash Dividends = -2,000
Bonds Retirement = -50,000

Net Cash Flow from Financing Activities = -37,000

Question 2: A Selling Price (Proceeds). In fact, on the cash flow statement it would be listed as "Proceeds from the sale of long-term assets". Doesn't matter whether the assets were sold for a profit or loss. The cash flow statement wants to know what the cash inflow was, and in this case it is the proceeds from the selling price.
2007-05-19 15:51:55
Chaminda:  Question 1 - c
Machinery Purchase (4,500.00)
Sale of investment 23,000.00
Sale of asset 4,500.00
Net Increase 23,000.00

Question 2 - a
Selling price (proceeds)
2007-05-22 07:33:20