Question: Drexon Corp., which follows U.S. GAAP, uses the direct method to report its cash flows. The CFO is assessing the impact on cash flows of

Drexon Corp., which follows U.S. GAAP, uses the direct method to report its cash flows. The CFO is assessing the impact on cash flows of 4 events during the fiscal year. Specify which category each event falls under (under the direct method) and note whether it increases cash, decreases cash, or has no impact on cash.

1. Accounts payable decreases from $400,000 to $385,000.

2. An interest payment of $85,000 is made on a new debt issuance.

3. Capital expenditures of $35,000 are made for equipment used in day to day operations.

4. Dividends of $6,500 are received from a stock classified as available for sale.

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