EXERCISE 1 (12 points) Classify each transaction as either: operating acivity (O), investing activity (I), financing activity (F), or noncash investing and financing activity (NC). Also, indicate whether the transaction generated a cash inflow, cash outflow, or no cash flow effect. Activity Affected Outflow, or No Transaction O, I, F, NC Cash Flow effect 1 Bonds payable are issued for cash at a discount 2 Land is sold for cash at book value 3 Bonds payable is converted into common stock 4 Paid a cash dividend to preferred stockholders. 5 Land was acquired by issuing common stock 6 Recorded sales on account 7 Merchandise is sold to customers for cash 8 | Equipment is purchased by signing a 3-year, 10% note payable 9 Sold buildings and equipment for cash 10 Purchased inventory for cash. 11 Common stock is sold for cash above par value 12 Cash proceeds from disposal of plant asset