Question

Oering's Furniture Corporation is a Virginia-based manufacturer of furniture. In a recent year, it reported the following activities

Net income $ 5,147
Purchase of property, plant, and equipment 2,084
Borrowings under line of credit (bank) 1,129
Proceeds from issuance of stock 26
Cash received from customers 37,179
Payments to reduce long-term debt 61
Sale of marketable securities 237
Proceeds from sale of property and equipment 6,892
Dividends paid 293
Interest paid 103
Purchase of treasury stock (stock repurchase) 2,571

Required: Based on this information, present the investing and financing activities sections of the cash flow statement. (List cash outflows as negative amounts.)

Answer 1

Answer and Explanation:

The presentation of the investing and financing activities are presented below:

Cash flow from investing activities

Purchase of property, plant, and equipment -$2,084

Proceeds from sale of property and equipment $6,892

Sale of marketable securities $229

Cash flow provided by investing activities $5,037

Cash flow from financing activities

Borrowings under line of credit $1,129

Proceeds from issuance of stock $26

Payments on long-term debt -$61

Payment of dividends -$293  

Purchase of treasury stock -$2,571

Net cash flow from financing activities $1,770

The positive sign indicates the cash inflow and negative sign indicates the cash outflow

Answer 2

• The presentation of the investing and financing activities are shown below:

Cash flow from investing activities

Purchase of property, plant, and equipment -$2,084

Proceeds from sale of property and equipment $6,892

Sale of marketable securities $229

Cash flow provided by investing activities $5,037

Cash flow from financing activities

Borrowings under line of credit $1,129

Proceeds from issuance of stock $26

Payments on long-term debt -$61

Payment of dividends -$293  

Purchase of treasury stock -$2,571

Net cash flow from financing activities $1,770

Like this way, it is to be presented.

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