A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resu

Question

3 years ago

5

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resu

lting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:
a.$3,000 outflow.
b.$60,000 outflow.
c.$57,000 outflow.

Business

1 answer:

kherson [118] · Answer 1 · 2022-06-21T14:05:36+03:00

Answer:

b.$60,000 outflow.

Explanation:

Cash flows from financing activities

Retiring value of bonds for cash -$60,000

Cash flow from financing activities -$60,000

Since the cash flow statement records only cash transactions. So in the given case, the bonds are retired for $60,000 in cash that reflects the cash outflow and the same is to be presented on the financial statements