Baird Corp. had the following activity in its most recent year of operations:
1. Purchase of equipment
2. Redemption of bonds
3. Conversion of bonds into common shares
4. Sale of building
5. Depreciation of equipment
6. Exchange of equipment for furniture of equal fair value
7. Issue of common shares
8. Amortization of intangible assets
9. Purchase of company's own shares
10. Issue of bonds for land
11. Impairment loss on goodwill
12. Unrealized holding loss on investment accounted at fair value with gains and losses in net income
13. Payment of dividends on common shares
14. Increase in interest receivable on notes receivable
15. Pension expense in excess of amount funded
16. Signing of a finance lease agreement for equipment
17. Payment of a monthly finance lease obligation
18. Purchase of a treasury bill as a cash equivalent
19. Payment on an operating lease agreement
20. Unrealized gain accrued on FV-NI equity security investments
21. Redemption of preferred shares classified as debt
22. Payments of principal on an operating line of credit
23. Payment of interest on an operating line of credit
24. Receipt of interest income on a note receivable
25. Receipt of dividends on an investment in common shares
26. Purchase of an investment in retractable preferred shares (that will mature within 90 days of purchase date)
Instructions
(a) Assume that Baird Corp. follows IFRS, and that the company has adopted the policy of classifying dividends received as operating activities, dividends paid as operating activities, interest received as investing activities, and interest paid as a financing activity on the cash flow statement. Using the indirect method, classify the items as one of the following:
1. An operating activity, added to net income;
2. An operating activity, deducted from net income;
3. An investing activity;
4. A financing activity;
5. A significant non-cash investing or financing activity; or
6. None of these options.
Where there are choices or options in the classification provide details of the options available.
(b) Assume instead that Baird Corp. is a private company and has decided