Statement of Cash Flows: Learning Objectives

Statement of
17 Cash Flows
Learning Objectives
Discuss the usefulness and format of the statement of
1 cash flows.
Prepare a statement of cash flows using the indirect

2 method.
3 Analyze the statement of cash flows.
17-1
LEARNING Discuss the usefulness and format of
1
OBJECTIVE the statement of cash flows.
Usefulness of the Statement of Cash Flows

Provides information to help assess:
1. Entity’s ability to generate future cash flows.
2. Entity’s ability to pay dividends and meet obligations.
3. Reasons for difference between net income and net cash

provided (used) by operating activities.
4. Cash investing and financing transactions during the period.
17-2 LO 1
Classification of Cash Flows
Operating Investing Financing

Activities Activities Activities
Income Changes in Changes in

Statement Items Investments Long-Term
and Long-Term Liabilities and
Asset Items Stockholders’
Equity Items
17-3 LO 1
Operating activities—Income statement items

Cash inflows: Illustration 17-1
Typical receipt and payment
classifications
From sale of goods or services.
From interest received and dividends received.
Cash outflows:
To suppliers for inventory.
To employees for wages.
To government for taxes.
To lenders for interest.
To others for expenses.
17-4 LO 1
Investing activities—Changes in investments and long-

term assets Illustration 17-1
Cash inflows: classifications
From sale of property, plant, and equipment.

From sale of investments in debt or equity securities of other
entities.
From collection of principal on loans to other entities.
Cash outflows:
To purchase property, plant, and equipment.
To purchase investments in debt or equity securities of other
entities.
To make loans to other entities.
17-5 LO 1
Financing activities—Changes in long-term liabilities

and stockholders’ equity Illustration 17-1
Cash inflows: classifications
From sale of common stock.

From issuance of debt (bonds and notes).
Cash outflows:
To stockholders as dividends.
To redeem long-term debt or reacquire
capital stock (treasury stock).
17-6 LO 1
Significant Noncash Activities
1. Direct issuance of common stock to purchase assets.

2. Conversion of bonds into common stock.
3. Issuance of debt to purchase assets.
4. Exchanges of plant assets.
Companies report noncash activities in either a

 separate schedule (bottom of the statement) or
 separate note to the financial statements.
17-7 LO 1
Accounting Across the Organization
Net What?
17-8 LO 1
Format of the Statement of Cash Flows
Order of Presentation:
Direct Method
1. Operating activities.
Indirect Method
2. Investing activities.
3. Financing activities.
17-9 LO 1
Illustration 17-2
Format of statement of cash flows
17-10 LO 1
DO IT! 1 Classification of Cash Flows
Illustration: Classify each of these transactions by type of cash

flow activity.
1. Issued 100,000 shares of $5 par value

Financing
common stock for $800,000 cash.
2. Borrowed $200,000 from Castle Bank, signing Financing
a 5-year note bearing 8% interest.
3. Purchased two semi-trailer trucks for $170,000 Investing
cash.
4. Paid employees $12,000 for salaries and
Operating
wages.
5. Collected $20,000 cash for services performed. Operating
17-11 LO 1
LEARNING Prepare a statement of cash flows
2
OBJECTIVE using the indirect method.
Three sources of information:

1. Comparative balance sheets
2. Current income statement
3. Additional information
17-12 LO 2
Preparing the Statement of Cash Flows
Three Major Steps:

Illustration 17-3
17-13 LO 2
Three Major Steps:

Illustration 17-3
17-14 LO 2
Three Major Steps:

Illustration 17-3
17-15 LO 2
Indirect and Direct Methods
Companies favor the indirect method for two reasons:

1. Easier and less costly to prepare.
2. Focuses on differences between net income and net

cash flow from operating activities.
17-16 LO 2
Indirect Method
COMPUTER SERVICES COMPANY

Income Statement
For the Month Ended December 31, 2017
Illustration 17-4
17-17 LO 2
Indirect Method
Illustration 17-4
2017 2016
17-18 LO 2
Indirect Method
Illustration 17-4
Additional information for 2017:

1. Depreciation expense was comprised of $6,000 for building and $3,000 for equipment.
2. The company sold equipment with a book value of $7,000 (cost $8,000, less accumulated
depreciation $1,000) for $4,000 cash.
3. Issued $110,000 of long-term bonds in direct exchange for land.
4. A building costing $120,000 was purchased for cash. Equipment costing $25,000 was also
purchased for cash.
5. Issued common stock for $20,000 cash.
6. The company declared and paid a $29,000 cash dividend.
17-19 LO 2
Step 1: Operating Activities
DETERMINE NET CASH PROVIDED/USED BY

OPERATING ACTIVITIES BY CONVERTING NET
INCOME FROM ACCRUAL BASIS TO CASH
BASIS.
Common adjustments to Net Income (Loss):
 Add back non-cash expenses (depreciation,
amortization, or depletion expense).
 Deduct gains and add losses.
 Analyze changes in noncash current asset and current
liability accounts.
17-20 LO 2
Question
Which is an example of a cash flow from an operating
activity?
a. Payment of cash to lenders for interest.
b. Receipt of cash from the sale of capital stock.
c. Payment of cash dividends to the company’s
stockholders.
d. None of the above.
17-21 LO 2
DEPRECIATION EXPENSE
Although depreciation expense reduces net income, it does
not reduce cash. The company must add it back to net
income.
Illustration 17-6
Cash flows from operating activities:
Net income $ 145,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 9,000
Net cash provided by operating activities $ 154,000
17-22 LO 2
LOSS ON DISPOSAL OF EQUIPMENT

Companies report as a source of cash in the investing
activities section the actual amount of cash received from
the sale.
 Any loss on disposal is added to net income in the
operating section.
 Any gain on disposal is deducted from net income in the
operating section.
17-23 LO 2
LOSS ON DISPOSAL OF EQUIPMENT

Illustration 17-7
Loss on disposal of equipment 3,000
17-24 LO 2
CHANGES TO NONCASH CURRENT ASSET

When the Accounts Receivable balance decreases, cash
receipts are higher than revenue earned under the accrual basis.
Illustration 17-8
Accounts Receivable
1/1/017 Balance 30,000 Receipts from customers 517,000

Sales Revenue 507,000
12/31/17 Balance 20,000
Company adds to net income the amount of the decrease in

accounts receivable.
17-25 LO 2

Illustration 17-9
Decrease in accounts receivable 10,000
17-26 LO 2

When the Inventory balance increases, the cost of
merchandise purchased exceeds the cost of goods sold.
Inventory
1/1/17 Balance 10,000 Cost of goods sold 150,000
Purchases 155,000
12/31/17 Balance 15,000
Cost of goods sold does not reflect cash payments made for
merchandise. The company deducts from net income this
inventory increase.
17-27 LO 2

Illustration 17-9

Increase in inventory (5,000)
17-28 LO 2

When the Prepaid Expense balance increases, cash paid for
expenses is higher than expenses reported on an accrual
basis. The company deducts the decrease from net income
to arrive at net cash provided by operating activities.
If prepaid expenses decrease, reported expenses are higher

than the expenses paid.
17-29 LO 2

Illustration 17-9
Increase in prepaid expenses (4,000)
17-30 LO 2
CHANGES IN CURRENT LIABILITIES

When Accounts Payable increases, the company received
more in goods than it actually paid for. The increase is added
to net income to determine net cash provided by operating
activities.
When Income Tax Payable decreases, the income tax

expense reported on the income statement was less than the
amount of taxes paid during the period. The decrease is
subtracted from net income to determine net cash provided by
operating activities.
17-31 LO 2
CHANGES IN CURRENT LIABILITIES

Illustration 17-10
Increase in accounts payable 16,000
Decrease in income taxes payable (2,000)
17-32 LO 2
Summary of Conversion to Net Cash Provided

by Operating Activities—Indirect Method
Illustration 17-11
17-33 LO 2
DO IT! 2a Cash from Operating Activities
Josh’s PhotoPlus reported net income of $73,000 for 2017.

Included in the income statement were depreciation expense of
$7,000 and a gain on disposal of equipment of $2,500. Josh’s
comparative balance sheets show the following balances.
12/31/16 12/31/17
Accounts receivable $17,000 $21,000
Accounts payable 6,000 2,200
Calculate net cash provided by operating activities for Josh’s
PhotoPlus.
17-34 LO 2
DO IT! 2a Cash from Operating Activities
Josh’s PhotoPlus reported net income of $73,000 for 2017, which

included depreciation expense of $7,000 and a gain on disposal
of equipment of $2,500. Accounts receivable increased $4,000
and accounts payable decreased by $3,800. Calculate net cash
provided by operating activities.
17-35 LO 2
Step 2: Investing and Financing Activities
Company purchased land of $110,000 by issuing long-term

bonds. This is a significant noncash investing and financing
activity that merits disclosure in a separate schedule.
Land
1/1/17 Balance 20,000
Issued bonds 110,000
12/31/17 Balance 130,000
Bonds Payable
1/1/17 Balance 20,000
For land 110,000
12/31/17 Balance 130,000
17-36 LO 2
Partial statement Illustration 17-13
Net cash provided by operating activities 172,000

Cash flows from investing activities:
Purchase of building (120,000)
Purchase of equipment (25,000)
Sale of equipment 4,000
Net cash used by investing activities (141,000)
Cash flows from financing activities:
Issuance of common stock 20,000
Payment of cash dividends (29,000)
Net cash used by financing activities (9,000)
Net increase in cash 22,000
Cash at beginning of period 33,000
Cash at end of period $ 55,000
Disclosure: Issuance of bonds to purchase land $ 110,000

17-37 LO 2
From the additional information, the company acquired an office

building for $120,000 cash. This is a cash outflow reported in
the investing section.
Building
1/1/17 Balance 40,000
Office building 120,000
12/31/17 Balance 160,000
17-38 LO 2
Partial statement Illustration 17-13


17-39 LO 2
The additional information explains that the equipment increase

resulted from two transactions: (1) a purchase of equipment of
$25,000, and (2) the sale for $4,000 of equipment costing $8,000.
Illustration 17-12
Equipment
1/1/17 Balance 10,000 Equipment sold 8,000
Purchase 25,000
12/31/17 Balance 27,000
Cash 4,000
Journal
Accumulated Depreciation 1,000
Entry
Loss on Disposal of Equipment 3,000
Equipment 8,000
17-40 LO 2
Illustration 17-13
Statement Cash flows from operating activities:

of Cash Adjustments to reconcile net income to net cash

Flows Depreciation expense

Loss on disposal of equipment
9,000
3,000
Indirect Decrease in income taxes payable (2,000)
Method Net cash provided by operating activities 172,000
17-41 LO 2
The increase in common stock resulted from the issuance of

new shares.
Common Stock
1/1/17 Balance 50,000
Shares sold 20,000
12/31/17 Balance 70,000
17-42 LO 2
Illustration 17-13
Partial statement

17-43 LO 2
Retained earnings increased $116,000 during the year. This

increase can be explained by two factors: (1) Net income of
$145,000 increased retained earnings, and (2) Dividends of
$29,000 decreased retained earnings.
Retained Earnings
1/1/17 Balance 48,000
Dividends 29,000 Net income 145,000
12/31/17 Balance 164,000
17-44 LO 2
Illustration 17-13
Statement Cash flows from operating activities:

of Cash Adjustments to reconcile net income to net cash

Flows Depreciation expense

Loss on disposal of equipment
9,000
3,000
Indirect Decrease in income taxes payable (2,000)
Method Net cash provided by operating activities 172,000
17-45 LO 2
Question
Which is an example of a cash flow from an investing
activity?
a. Receipt of cash from the issuance of bonds payable.
b. Payment of cash to repurchase outstanding capital
stock.
c. Receipt of cash from the sale of equipment.
d. Payment of cash to suppliers for inventory.
17-46 LO 2
Step 3: Net Change in Cash
Compare the net change in cash on the Statement of Cash

Flows with the change in the cash account reported on the
Balance Sheet to make sure the amounts agree.
Illustration 17-4
2017 2016
17-47 LO 2
Accounting Across the Organization
Burning Through Our Cash
Box (cloud storage), Cyan (game creator), Fireeye (cyber security), and Mobile
Iron (mobile security of data) are a few of the tech companies that recently have
issued or are about to issue stock to the public. Investors now have to determine
whether these tech companies have viable products and high chances for success.
An important consideration in evaluating a tech company is determining its financial
flexibility—its ability to withstand adversity if an economic setback occurs. One way
to measure financial flexibility is to assess a company’s cash burn rate, which
determines how long its cash will hold out if the company is expending more cash
than it is receiving. Fireeye, for example, burned cash in excess of $50 million in
2013. But the company also had over $150 million as a cash cushion, so it would
take over 30 months before it runs out of cash. And even though Box has a much
lower cash burn rate than Fireeye, it still has over a year’s cushion. Compare that to
the tech companies in 2000, when over one-quarter of them were on track to run out
of cash within a year. And many did. Fortunately, the tech companies of today seem
to be better equipped to withstand an economic setback.
Source: Shira Ovide, “Tech Firms’ Cash Hoards Cool Fears of a Meltdown,” Wall Street
Journal (May 14, 2014).
17-48 LO 2
LEARNING
OBJECTIVE
3 Analyze the statement of cash flows.
Free Cash Flow

Illustration 17-14
Free cash flow describes the cash remaining from

operations after adjustment for capital expenditures and
dividends.
17-49 LO 3
Free Cash Flow Illustration 17-15
Microsoft’s cash flow
information ($ in millions)
Required:
Calculate
Microsoft’s
free cash
flow.
Cash provided by operating activities $21,863

Less: Expenditures on property, plant, and equipment 4,257
Dividends paid 7,455
Free cash flow
$10,151
17-50 LO 3
LEARNING APPENDIX 17A: Statement of Cash
4
OBJECTIVE Flows Using the Direct Method.
1. Compute net cash provided by operating activities

by adjusting each item in the income statement from
the accrual basis to the cash basis.
2. Companies report only major classes of operating

cash receipts and cash payments.
3. For these major classes, the difference between

cash receipts and cash payments is the net cash
provided by operating activities.
17-51 LO 4
Step 1: Operating Activities Illustration 17A-2
Major classes of cash
receipts and payments
17-52 LO 4
Direct Method
COMPUTER SERVICES COMPANY

Income Statement
For the Month Ended December 31, 2017
Illustration 17-4
17-53 LO 4
Direct Method
Illustration 17-4
2017 2016
17-54 LO 4
Direct Method
Illustration 17-4

purchased for cash.
17-55 LO 4
Cash Receipts from Customers

For Computer Services, accounts receivable decreased $10,000.
Illustration 17A-4
Accounts Receivable
1/1/017 Balance 30,000 Receipts from customers 517,000
Sales revenue 507,000
12/31/17 Balance 20,000
Illustration 17A-5
17-56 LO 4
Cash Payments to Suppliers

In 2017, Computer Services Company’s inventory increased $5,000
and cash payments to suppliers were $139,000.
Inventory
1/1/17 Balance 10,000 Cost of goods sold 150,000
Purchases 155,000
12/31/17 Balance 15,000
Illustration 17A-8
Accounts Payable
Payment to suppliers 139,000 1/1/17 Balance 12,000
Purchases 155,000
12/31/17 Balance 28,000
17-57 LO 4
Cash Payments to Suppliers

In 2017, Computer Services Company’s inventory increased $5,000
and cash payments to suppliers were $139,000.
Illustration 17A-10
Formula to compute cash payments
to suppliers—direct method
17-58 LO 4
Cash Payments for Operating Expenses

Cash payments for operating expenses were $115,000.
Illustration 17A-11
Illustration 17A-12
17-59 LO 4
Cash Payments for Interest

In 2017, Computer Services’ had interest expense of $42,000.
Interest Payable
Cash paid for interest 42,000 1/1/17 Balance
0
Interest expense
42,000
12/31/17 Balance
0
17-60 LO 4
Cash Payments for Income Taxes

Cash payments for income taxes were $49,000.
Income Tax Payable

Cash paid for taxes 49,000 1/1/17 Balance
8,000
Income tax expense
47,000
12/31/17 Balance
6,000
Illustration 17A-15
17-61 LO 4
Illustration 17A-16
Operating activities section
of the statement of cash flows
17-62 LO 4
Increase in Equipment. (1) Equipment purchased for $25,000, and

(2) equipment sold for $4,000, cost $8,000, book value $7,000.
Equipment Illustration 17A-17
1/1/17 Balance 10,000 Cost of equipment sold 8,000

Purchases 25,000
12/31/17 Balance 27,000
Accumulated Depreciation
Equipment sold 1,000 1/1/17 Balance
1,000
Depreciation expense
3,000
12/31/17 Balance
3,000
17-63 LO 4
Increase in Equipment. (1) Equipment purchased for $25,000, and

(2) equipment sold for $4,000, cost $8,000, book value $7,000.
Cash 4,000
Accumulated Depreciation 1,000
Loss on Disposal of Equipment 3,000
Equipment 8,000
17-64 LO 4
Increase in Land. Land increased Significant noncash

$110,000. The company purchased investing and
land of $110,000 by issuing bonds. financing transaction.
Increase in Building. Acquired building Investing transaction.

for $120,000 cash.
Increase in Bonds Payable. Bonds

Significant noncash
Payable increased $110,000. The investing and
company acquired land by exchanging financing transaction.
bonds for land.
17-65 LO 4
Increase in Common Stock. Increase

in Common Stock of $20,000. Increase Financing
transaction.
resulted from the issuance of new
shares of stock.
Increase in Retained Earnings. The

$116,000 net increase in Retained Financing
Earnings resulted from net income of transaction
$145,000 and the declaration and (cash dividend)
payment of a cash dividend
of $29,000.
17-66 LO 4
Illustration 17A-18
Statement of cash flows,
2017—direct method
17-67 LO 4
Step 3: Net Change in Cash
Compare the net change in cash on the Statement of Cash Flows with
the change in the cash account reported on the Balance Sheet to
make sure the amounts agree.
Illustration 17-4
2017 2016
17-68 LO 4
LEARNING APPENDIX 17B: Use a worksheet to prepare the
OBJECTIVE
5 statement of cash flows using the indirect method.
Illustration 17B-2
Comparative
balance sheets,
income statement,
and additional
information for
Computer Services
Company
17-69
Preparing the Worksheet
Illustration 17B-2
Comparative
balance sheets,
income statement,
and additional
information for
Computer Services
Company

purchased for cash.
17-70 LO 5
Preparing the Worksheet
1. Enter in the balance sheet accounts section the balance sheet

accounts and their beginning and ending balances.
2. Enter in the reconciling columns of the worksheet the data that
explain the changes in the balance sheet accounts other than
cash and their effects on the statement of cash flows.
3. Enter on the cash line and at the bottom of the worksheet the
increase or decrease in cash. This entry should enable the
totals of the reconciling columns to be in agreement.
17-71 LO 5
Preparing
the
Worksheet
Illustration 17B-3
Completed worksheet—
indirect method
17-72 LO 5
LEARNING APPENDIX 17C: Use the T-account approach
6
OBJECTIVE to prepare a statement of cash flows.
The change in cash is equal to the change in all of the other

balance sheet accounts.
If we analyze the changes in all of the noncash balance sheet
accounts, we will explain the change in the cash account.
17-73 LO 6
Illustration 17C-1
17-74 LO 6
A Look at IFRS
LEARNING Compare the procedures for the statement

7
OBJECTIVE of cash flows under GAAP and IFRS.
Relevant Facts
Similarities
 Companies preparing financial statements under IFRS must prepare
a statement of cash flows as an integral part of the financial
statements.
 Both IFRS and GAAP require that the statement of cash flows
should have three major sections—operating, investing, and
financing—along with changes in cash and cash equivalents.
17-75 LO 7
A Look at IFRS
Relevant Facts
 Similar to GAAP, the cash flow statement can be prepared using
either the indirect or direct method under IFRS. In both U.S. and
international settings, companies choose for the most part to use the
indirect method for reporting net cash flows from operating activities.
 The definition of cash equivalents used in IFRS is similar to that
used in GAAP. A major difference is that in certain situations, bank
overdrafts are considered part of cash and cash equivalents under
IFRS (which is not the case in GAAP). Under GAAP, bank
overdrafts are classified as financing activities in the statement of
cash flows and are reported as liabilities on the balance sheet.
17-76 LO 7
A Look at IFRS
Relevant Facts
Differences
 IFRS requires that noncash investing and financing activities be
excluded from the statement of cash flows. Instead, these noncash
activities should be reported elsewhere. This requirement is
interpreted to mean that noncash investing and financing activities
should be disclosed in the notes to the financial statements instead
of in the financial statements. Under GAAP, companies may present
this information on the face of the statement of cash flows.
17-77 LO 7
A Look at IFRS
Relevant Facts
 One area where there can be substantial differences between IFRS
and GAAP relates to the classification of interest, dividends, and
taxes. The following table indicates the differences between the two
approaches.
17-78 LO 7
A Look at IFRS
Relevant Facts
 Under IFRS, some companies present the operating section in a
single line item, with a full reconciliation provided in the notes to the
financial statements. This presentation is not seen under GAAP.
17-79 LO 7
A Look at IFRS
Looking to the Future

Presently, the FASB and the IASB are involved in a joint project on the
presentation and organization of information in the financial statements.
One interesting approach, revealed in a published proposal from that
project, is that in the future the income statement and balance sheet would
adopt headings similar to those of the statement of cash flows. That is, the
income statement and balance sheet would be broken into operating,
investing, and financing sections.
17-80 LO 7
A Look at IFRS
IFRS Self-Test Questions

Under IFRS, interest paid can be reported as:
a) only a financing element.
b) a financing element or an investing element.
c) a financing element or an operating element.

d) only an operating element.
17-81 LO 7
A Look at IFRS

IFRS requires that noncash items:
a) be reported in the section to which they relate, that is, a
noncash investing activity would be reported in the
investing section.
b) be disclosed in the notes to the financial statements.
c) do not need to be reported.
d) be treated in a fashion similar to cash equivalents.
17-82 LO 7
A Look at IFRS

In the future, it appears likely that:
a) the income statement and balance sheet will have headings of
operating, investing, and financing, much like the statement of
cash flows.
b) cash and cash equivalents will be combined in a single line
item.
c) the IASB will not allow companies to use the direct approach
to the statement of cash flows.
d) None of the above.
17-83 LO 7
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Statement of

Prepare a statement of cash flows using the indirect

3 Analyze the statement of cash flows.

Usefulness of the Statement of Cash Flows

2. Entity’s ability to pay dividends and meet obligations.

3. Reasons for difference between net income and net cash

4. Cash investing and financing transactions during the period.

Operating Investing Financing

Income Changes in Changes in

Operating activities—Income statement items

Investing activities—Changes in investments and long-

From sale of property, plant, and equipment.

Financing activities—Changes in long-term liabilities

From sale of common stock.

1. Direct issuance of common stock to purchase assets.

Companies report noncash activities in either a

Illustration: Classify each of these transactions by type of cash

1. Issued 100,000 shares of $5 par value

Three sources of information:

2. Current income statement

Three Major Steps:

Three Major Steps:

Three Major Steps:

Companies favor the indirect method for two reasons:

2. Focuses on differences between net income and net

COMPUTER SERVICES COMPANY

Additional information for 2017:

DETERMINE NET CASH PROVIDED/USED BY

LOSS ON DISPOSAL OF EQUIPMENT

LOSS ON DISPOSAL OF EQUIPMENT

CHANGES TO NONCASH CURRENT ASSET

1/1/017 Balance 30,000 Receipts from customers 517,000

12/31/17 Balance 20,000

Company adds to net income the amount of the decrease in

CHANGES TO NONCASH CURRENT ASSET

CHANGES TO NONCASH CURRENT ASSET

12/31/17 Balance 15,000

CHANGES TO NONCASH CURRENT ASSET

Cash flows from operating activities:

CHANGES TO NONCASH CURRENT ASSET

If prepaid expenses decrease, reported expenses are higher

CHANGES TO NONCASH CURRENT ASSET

CHANGES IN CURRENT LIABILITIES

When Income Tax Payable decreases, the income tax

CHANGES IN CURRENT LIABILITIES

Summary of Conversion to Net Cash Provided

Josh’s PhotoPlus reported net income of $73,000 for 2017.

Josh’s PhotoPlus reported net income of $73,000 for 2017, which

Company purchased land of $110,000 by issuing long-term

Net cash provided by operating activities 172,000

Disclosure: Issuance of bonds to purchase land $ 110,000

From the additional information, the company acquired an office

12/31/17 Balance 160,000

Net cash provided by operating activities 172,000

Disclosure: Issuance of bonds to purchase land $ 110,000

The additional information explains that the equipment increase

12/31/17 Balance 27,000

Statement Cash flows from operating activities:

of Cash Adjustments to reconcile net income to net cash

Flows Depreciation expense

The increase in common stock resulted from the issuance of

12/31/17 Balance 70,000

Disclosure: Issuance of bonds to purchase land $ 110,000