[shana_alex23]

State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows:
a) sold 5,000 shares of $30 par common stock for $90 per share.
b)sold equipement with a book value of $42,500 for $36,000.
c) Sold a new issue of $100,000 of bonds at 98.
d) Retired $500,000 of bonds on which there was $2,500 of unamortized discount for $500,500.

Answers I got:
a) cash receipt, $300,000
b)cash receipt, $6,500
c) cash receipt, 98?
d) cash receipt, $2,500

[morgaine300]

a) sold 5,000 shares of $30 par common stock for $90 per share.
b)sold equipement with a book value of $42,500 for $36,000.

Note how much these transactions were actually done for. How much cash did they actually get?

c) Sold a new issue of $100,000 of bonds at 98.

The 98 means 98%.

d) Retired $500,000 of bonds on which there was $2,500 of unamortized discount for $500,500.

Answers I got:
a) cash receipt, $300,000
b)cash receipt, $6,500
c) cash receipt, 98?
d) cash receipt, $2,500

The first 3 are receipts. Retiring bonds means they're paying them off. None of the dollar amounts are correct. Note the bolded stuff above.