Statement of Cash Flows: Investing and Financing Activities | Boston Corp. | Year Ended December 31, 1996

Net Cash Flows from Investing and Financing Activities

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Question

The following information was taken from the accounting records of Boston Corp. for the year ended December 31, 1996 (in $000):

Proceeds from issuance of preferred stock F$4,000

Dividends paid on preferred stock F400

Bonds payable converted to common stock NC2,000

Payment for purchase of machinery I500

Proceeds from sale of plant building I1,200

2% stock dividend on common stock NC300

Gain on sale of plant building I200

The net cash flows from investing and financing activities that should be presented on Boston's statement of cash flows for the year ended December 31, 1996 are, respectively (in $000) ________.

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A. B. C. D. E.

A

Investing activities include the acquisition and disposal of all long-term assets. Thus, the purchase of machinery and sale of plant building for a total of $700 inflow from investing (-$500 + 1,200). Financing activities include the issuance and repurchase of shares, dividends and changes in long- term liabilities. In this case, the issuance of preferred stock and payment of dividends for a total of $3,600 inflow from financing ($4,000-400). The conversion of bonds into common stock and the stock dividend do not affect cash.

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