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6 July, 15:23

Effect of Transactions on Cash Flows State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows: Retired $200,000 of bonds, on which there was $2,000 of unamortized discount, for $208,000. Sold 12,000 shares of $20 par common stock for $39 per share. Sold equipment with a book value of $47,500 for $68,400. Purchased land for $328,000 cash. Purchased a building by paying $51,000 cash and issuing a $90,000 mortgage note payable. Sold a new issue of $270,000 of bonds at 98. Purchased 4,000 shares of $30 par common stock as treasury stock at $60 per share. Paid dividends of $1.90 per share. There were 19,000 shares issued and 3,000 shares of treasury stock.

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  1. 6 July, 19:02
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    The classification is shown below:

    Explanation:

    As we already know that

    Cash receipts is the amount which is received by the company in cash that results in increment in cash balance. It is a cash inflow

    While the cash payment is the amount which has to be paid by the company in cash that results in decrements in cash balance. It is a cash outflow

    So based on this, the categorization is presented below:

    Retired $200,000 of bonds, on which there was $2,000 of unamortized discount, for $208,000. = Cash payment for $208,000

    Sold 12,000 shares of $20 par common stock for $39 per share. = 12,000 shares * $39 = $468,000 cash receipt

    Sold equipment with a book value of $47,500 for $68,400. = Cash receipt for $68,400

    Purchased land for $328,000 cash. = Cash payment for $328,000

    Purchased a building by paying $51,000 cash and issuing a $90,000 mortgage note payable. = Cash payment for $51,000

    Sold a new issue of $270,000 of bonds at 98. = Cash receipts for $264,600 ($270,000 * 0.98)

    Purchased 4,000 shares of $30 par common stock as treasury stock at $60 per share. = Cash payment for $240,000 (4,000 shares * $60)

    Paid dividends of $1.90 per share There were 19,000 shares issued and 3,000 shares of treasury stock. = Cash payment for $304,00 (19,000 shares - 3,000 shares) * $1.90
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