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, resulting 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.

Question

Irvin Arias

Business

18 May, 08:33

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, resulting 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.

+1

Answers (1)

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Thompson · Answer 1

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

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, resulting 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.

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, resulting 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.