Grace Jones, the bookkeeper for Tenn Valley Company, asks for your help in identifying whether the following

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Grace Jones, the bookkeeper for Tenn Valley Company, asks for your help in identifying whether the following transactions should be reported on the corporation's statement of cash flows. Prepare a list for Jones indicating whether or not each transaction should be reported on the statement. If the transaction should appear on the statement, indicate whether it should be classified as a financing activity, an investing activity, or an operating activity. If the transaction should not be part of the statement of cash flows, explain why not.
1. Prepaid three months of rent on warehouse storage facilities at the end of the year.
2. Paid suppliers amount due on accounts payable.
3. Issued common stock for cash.
4. Collected an accounts receivable from a customer.
5. Paid cash dividends on common stock.
6. Purchased common stock of Apple as investment for cash.
7. Borrowed cash, signing a short-term note that was repaid before the end of the year.
8. Paid federal income taxes due.
9. Issued long-term bonds for cash.
10. Used proceeds from bond issue to purchase new equipment for plant.
11. Received principal payments on note receivable held in connection with sale of building last year.
12. Distributed a stock dividend on common stock.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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College Accounting Chapters 1-30

ISBN: 978-0077862398

14th edition

Authors: John Price, M. David Haddock, Michael Farina

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