A parent acquired a subsidiary by issuing $2000,000 common stock and $1000,000 long term debt. This acquisition affects the cash flow statement as flow: A. Not affect the cash flow statement. B. Increase cash under investing activity section by $3000,000. C. Increase cash under financing activity section by $2000,000. D. Increase cash under financing activity section by $3000,000

A parent acquired a subsidiary by issuing $2000,000 common stock and $1000,000 long term debt. This acquisition affects the cash flow statement as flow: A. Not affect the cash flow statement. B. Increase cash under investing activity section by $3000,000. C. Increase cash under financing activity section by $2000,000. D. Increase cash under financing activity section by $3000,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter12: The Statement Of Cash Flows

Section: Chapter Questions

Problem 12.24MCE

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III. The following changes in the statement of financial position accounts of BC were gathered for preparation of Statement on Cash Flow: Cash Short-term investment Accounts receivable Inventory Noncurrent investment Equipment Accumulated depreciation - increase Accounts payable Dividends payable Short-term notes, non-trade Long-term debts Ordinary share, P10 par Share premium (APIC) Accumulated profits Increase (Decrease) 270,000 200,000 (20,000) 100,000 (100,000) 700,000 50,000 (5,000) 160,000 300,000 130,000 150,000 75,000 290,000 The following additional information relates to the same year: a. Net income was P1,090,000. b. Cash dividend declared was P800,000. c. Equipment costing P600,000 and having carrying cost of P350,000 was sold for P350,000. Required: Determine the following: 1. Total net cash flow 2. Net cash flow from operating 3. Net cash flow from investing 4. Net cash flow from financing
33. An entity had the following activities during the current year: Acquired share capital of another entity 2,000,000 Sold an investment with carrying amount of P2,000,000 1,500,000 Acquired a one-year certificate of deposit from a bank 5,000,000 Interest on the deposit received from the bank 500,000 Collected dividends on share investments 300,000 What amount should be reported as net cash used in investing activities? a. 5,500,000 b. 5,000,000 c. 4,700,000 d. 6,300,000
Consolidated Cash from Operations Consider the following data reported in the accounts of a parent company and its 80-percent-owned subsidiary. Net income Depreciation expense Amortization expense Dividends paid in cash Income from equity method investments Cash dividends received from equity investments items appearing in eliminating entries: Revaluation write-offs: Depreciation expense. Amortization expense $3,000 15,000 40,000 Parent Subsidiary $1,000,000 (1) $240.000 175,000 38.000 50,000 250,000 75.000 60,000 35,000 Goodwill impairment loss (1) Parent's separate income only; does not include equity in net income of subsidiary. Required a. Calculate consolidated net income. b. Prepare the cash from operating activities section of the consolidated statement of cash flows, starting with consolidated net income, using the indirect method. Assume no adjustment is required for changes in consolidated current asset and current liability accounts. Use a negative sign with answers to…
Parent plc obtained control of Subsidiary plc on 12 February 20X1, when Subsidiary plc held £28,000 in accounts receivable. At 31 December 20X1, Parent and Subsidiary had accounts receivable of £90,000 and £35,000, respectively. At 1 January 20X1, Parent had £75,000 in accounts receivable. In relation to Parent plc’s consolidated statement of cash flow, what is the impact of the change in accounts receivable for the financial year ending 31 December 20X1? a. An increase in cash flow of £50,000 b. A decrease in cash flow of £50,000 c. An increase in cash flow of £22,000 d. A decrease in cash flow of £22,000 e. An increase in cash flow of £15,000 f. A decrease in cash flow of £15,000
REQUIRED Study the statement of cash flows of Mantis Limited for the year ended 31 December 2021 and answer the following questions: Calculate the following for the year ended 31 December 2021: Depreciation Dividends paid Of what significance is this statement of cash flows to the shareholders of Mantis Limited? Comment on the following: Cash flows from operating activities (R181 800) 1.3.2. Increase in inventory (R808 000) Increase in receivables (R606 000) Interest paid (R80 800) Cash flows from investing activities (R2 343 200) INFORMATION MANTIS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 R Cash flows from operating activities (181 800) Operating profit 979 700 Depreciation ? Profit before working capital changes ? Working capital changes (808 000) Increase in inventory (808 000) Increase in receivables…
An analysis of R Corporation's Investment in Marketable Securities account during 20x6 disclosed the following: Debit Entries P175,000 Credit Entries P245,000 The company's come statement included a P35,000 gain on sale of marketable securities and P20,000 dividend income from marketable securities. All payments and proceeds relating to marketable securities transactions were in cash. 1. Cash Paid for the purchase of marketable securities 2. Cash proceeds recerved for the sale of marketable securities 3. Cash flow from operating activities 4. Cash flow from investing activities. Usc negative sign if your answer is net cash used.
Assume a company’s balance sheet showed beginning and ending balances in the Long-Term Investments account of $1,100,000 and $900,000, respectively. The company sold a long-term investment that cost $300,000 and recorded a gain on this sale of $35,000. Based solely on the information provided, the company’s net cash provided by (used in) investing activities would be: Multiple Choice $200,000. $300,000. $235,000. $335,000.
On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be a. deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends b. added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends c. deducted from net income in converting the net income reported on the income statement to cash flows from operating activities d. added to net income in converting the net income reported on the income statement to cash flows from operating activities
On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be a.deducted from net income in converting the net income reported on the income statement to cash flows from operating activities b.added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends c.deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends d.added to net income in converting the net income reported on the income statement to cash flows from operating activities
Jordan Company recognized a 5,000 unrealized holding gain on investment in Starbuckss common stock during 2019. The company classified as equity investments. How would this information be reported in a statement of cash flows prepared using the indirect method?
Dunn Company recognized a 5,000 unrealized holding gain on investment in Starbuckss long-term bonds during 2019. The company classified its investment as an available-for-sale security. How would this information be reported on a statement of cash flows prepared using the indirect method?
Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.

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	A.	Not affect the cash flow statement.
	B.	Increase cash under investing activity section by $3000,000.
	C.	Increase cash under financing activity section by $2000,000.
	D.	Increase cash under financing activity section by $3000,000