Assuming a cash flow statement is prepared using the indirect method, indicate the

reporting of the transactions and events listed below by major categories on the

statement. Use the following code letters to indicate the appropriate category under which

the item would appear on the cash flow statement.

Codes:

A

Cash flows from operating activities (Add to profit)

D

Cash flows from operating activities (Deduct from profit)

IA

Cash flows from investing activities

FA

Cash flows from financing activities

Category

1. Common shares are issued for cash.

_____

2. Merchandise inventory increased during the period.

_____

3. Depreciation expense recorded for the period.

_____

4. Building was purchased for cash.

_____

5. Bonds payable were acquired and retired at their carrying value.

_____

6. Accounts payable decreased during the period.

_____

7. Prepaid expenses decreased during the period.

_____

8. Investment in common shares of another company were acquired for

cash.

_____

9. Land is sold for cash at an amount equal to carrying amount.

_____

10. Loss on sale of equipment was recorded on the income

statement.

____