The statement of cash flows classifies each transaction as an operating activity, an investing activity or a financing activity. Operating activities are the types of activities the company performs to generate profits. Investing activities include the purchase of long-lived assets such as equipment or the purchase of investment securities. Financing activities are borrowing money, issuing shares, and paying dividends.
Presented below arc the following transactions
1. Issued shares for $20,000 cash.
2. Issued note payable or $10,000 cash.
3. Purchased office equipment for $11,000 cash.
4. Received $15.000 cash for services provided.
5. Paid $1,000 cash for rent.
6. Paid $600 cash dividend to shareholders.
7. Paid $6,500 cash for salaries.

Classify each of these transactions as operating, investing, or financing activities.

  • CreatedMarch 11, 2013
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