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cengageNOWv2lOnlir × ? Cengage Learni Cengage Learning Cengage Learning Learning Land Tr on the Statement of Cash Flows Alpha Corporation purchased land for $320,000. Later in the year, the company sold a different piece of land with a book value of $176,000 for $157,000 How are the effects of these transactions reported on the statement of cash flows? Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if requir effect on the statement of cash flows, select \"No effect\" from the drop down menu and leave the amount box blank. Transactions Gain or loss on sale of land Action Amount Added to net income 19,000 Cash recelived from sale of LandP 157,000 Cash paid for purchase of land Part of cash nows used for investing activities 020.000 Part of cash flows from investing activities

Solution

Purchased land for $320,000

Sold land of the book value of $176,000 for $157,000

Hence, loss on sale of land = $19,000

Loss on sale of land $ 19,000- It will be added to the net income

Cash received from the sale of land $157,000 - It is part of cash inflows from investing activities. It will be added.

Cash paid for purchase of land $320,000 - It is a part of cash outflows used in investing activities. It will be subtracted.

Dividends per share

20,000 shares of cumulative preferred 3% stock $100 par

50,000 shares of $30 par common stock

Dividends paid during the last 3 years :

Year 1 = $120,000

Year 2 = $30,000

Year 3 = $180,000

Dividend payable on preferred stock is $3 per share per year

Year 1

Dividend payable on preferred stock = 20,000 x 3

= $60,000

Hence, dividends paid on common shares = 120,000 - 60,000

= $60,000

Hence, dividend per share paid on common stock = 60,000/50,000

=$1.2

Year 3

Since, dividend per share paid on preferred stock in the year 2 was $1.5, although the dividend payable per share is $3, hence remaining $1.5 dividend per share will accumulate and it will be paid in the year 3.

Hence, dividend per share on preferred stock in year 3 will be = 3 + 1.5

= $4.5

Dividend payable on preferred stock = 20,000 x 4.5

= $90,000

Hence, dividends paid on common shares = 180,000 - 90,000

= $90,000

Hence, dividend per share paid on common stock = 90,000/50,000

=$1.8

	Year 1	Year 2	Year 3
Preferred stock (Dividend per share)	3	1.5	4.5
Common stock (Dividend per share)	1.2	0	1.8