Question

The following are several items that might be disclosed on a company’s statement of cash flows presented using the indirect method.
a. Net income
b. Depreciation expense
c. Issuance of common stock
d. Loss on disposal of equipment
e. Purchase of a building
f. Decrease in accounts payable
g. Converted bonds into common stock
h. Sale of long-term investment
i. Payment of interest
j. Increase in inventory

Required:
1. Indicate whether each item should be classified as a cash flow from operating activities, a cash flow from investing activities, a cash flow from financing activities, or a noncash investing and financing activity.
2. Why is the proper classification of cash flows important?


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  • CreatedSeptember 22, 2015
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