Homework SourseAn analysis of the Marketable Securities control account of
An analysis of the Marketable Securities control account of Fancher Products, Inc., shows the following entries during the year.
Balance, Jan. 1
$
280,000
Debit entries
290,000
Credit entries
(150,000
)
Balance, Dec. 31
$
420,000
In addition, the company’s income statement includes a $35,000 loss on sales of marketable securities. None of the company’s marketable securities is considered a cash equivalent.
Compute the amounts that should appear in the statement of cash flows as:
Purchase of marketable securities ______
Proceeds from sales of marketable securities _______
| Balance, Jan. 1 | $ | 280,000 | |
| Debit entries | 290,000 | ||
| Credit entries | (150,000 | ) | |
| Balance, Dec. 31 | $ | 420,000 | |
Solution
Answer:
1
Purchase of marketable securities =$290,000
Explanation:
As it was given in the question Debit entries of $290,000 and debit entries means purchase of security so in the statement of cash flows as Purchase of marketable securities =$290,000
_______________________________
2
Proceeds from sales of marketable securities =$115,000.
Explanation:
Book value
150,000
Less: loss on sales of marketable securities
35,000
net cash flow from Sale of marketable securities
115,000
____________________________________________
Purchase of marketable securities =$290,000
Proceeds from sales of marketable securities =$115,000.
| Book value | 150,000 |
| Less: loss on sales of marketable securities | 35,000 |
| net cash flow from Sale of marketable securities | 115,000 |
