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.

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

$25,000

Explanation:

The formula to calculate operating income/(loss) is ;

Operating income/(loss)=Number of units x (sales price - variable cost) - fixed cost

Since the information below are given;

Number of sets/units= 2,200

Sales price= $135

Variable cost= $85

Fixed cost is $85,000 at a level of 2,200units.

Note: We will ignore the monthly fixed cost of $126,00 at 2,600 sets because it is greater than fixed cost of $85,000 at a level of 2,200 sets .

Therefore;

Operating income/(loss) =Number of units x (Sales price - Variable cost)

- Fixed cost

=2,200 x ($135 - $85) - $85,000

= $110,000 - $85,000

=$25,000

Therefore, the budgeted operating income/(loss) at a sales level of 2,200 sets is $25,000.