85Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
20142013Increase/decrease
Accounts payable$ 4,000$ 6,000$(2,000)
Accrued liabilities2,0001,0001,000
Long-term notes payable84,00090,000(6,000)
Total liabilities$90,000$97,000$(7,000)
Additional information provided:
?During 2014, the company repaid $40,000 of long-term notes payable.
?During 2014, the company borrowed $34,000 on a new note payable.
Using the above information, please analyze the activity in the long-term notes payable account using the flowing T-account format:
Long-term notes payable
90,000
86Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following sections of the comparative balance sheet:
20142013Increase/decrease
Accounts payable$ 4,000$ 6,000$ (2,000)
Accrued liabilities2,0001,0001,000
Long-term notes payable84,00090,000(6,000)
Total liabilities$ 90,000$ 97,000$ (7,000)
Common stock30,0002,00028,000
Retained earnings113,00074,00039,000
Treasury stock(8,000)(5,000)(3,000)
Total equity$135,000$ 71,000$64,000
Total liabilities and equity$225,000$168,000$57,000
Additional information:
?No stock was retired.
?No treasury stock was sold.
?During 2014, the company repaid $40,000 of long-term notes payable.
?During 2014, the company borrowed $34,000 on a new note payable.
?Net income for the year was $49,000.
Please prepare the financing section of the statement of cash flows using the following format:
Financing activities:
Issuance of stock
Purchase of treasury stock
Sale of treasury stock
Borrowing on notes payable
Repayments of notes payable
Payment of dividends
Net cash from financing activities