In preparation for developing its statement of cash flows for the year just ended, D-Rose Distributors collected the following information: ($ in millions) Purchase of treasury bills (considered a cash equivalent) 6.7 Sale of preferred stock 150.7 Gain on sale of land 4.7 Proceeds from sale of land 25.7 Issuance of bonds payable for cash 140.7 Purchase of equipment for cash 30.7 Purchase of GE stock 35.7 Declaration of cash dividends 134.7 Payment of cash dividends declared in previous year 130.7 Purchase of treasury stock 120.7 Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) 110.7 Required: 1. Prepare the investing activities section of D-Rose's statement of cash flows. 2. Prepare the financing activities section of D-Rose's statement of cash flows.

Question

Business

Charlie Weaver

11 June, 19:18

In preparation for developing its statement of cash flows for the year just ended, D-Rose Distributors collected the following information: ($ in millions) Purchase of treasury bills (considered a cash equivalent) 6.7 Sale of preferred stock 150.7 Gain on sale of land 4.7 Proceeds from sale of land 25.7 Issuance of bonds payable for cash 140.7 Purchase of equipment for cash 30.7 Purchase of GE stock 35.7 Declaration of cash dividends 134.7 Payment of cash dividends declared in previous year 130.7 Purchase of treasury stock 120.7 Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) 110.7 Required: 1. Prepare the investing activities section of D-Rose's statement of cash flows. 2. Prepare the financing activities section of D-Rose's statement of cash flows.

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Alannah Trevino · Answer 1

Answer and Explanation:

1. The preparation of the investing activities is presented below:

Cash flow from investing activities

Proceeds from sale of land $25.7

Purchase of equipment for cash - $30.7

Purchase of GE stock - $35.7

Net cash used by investing activities - $40.7

2. The preparation of the financing activities is presented below:

Cash flow from financing activities

Sale of preferred stock 150.7

Issuance of bonds payable for cash 140.7

Payment of cash dividends declared in previous year - 130

Purchase of treasury stock - 120

Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) - 110.7

Net cash used by financing activities - $69.3

The minus sign shows the cash outflow and the positives sign shows the cash inflow