M$4-29.$ Classifying Statement of Cash Flows Components and Determining Their Effects

The following table presents selected items from a recent statement of cash flows of Nordstrom, Inc.

a$.$ For each item, determine whether the amount would be disclosed in the statement of cash

flows under operating activities, investing activities, or financing activities. $($Nordstrom uses

the indirect method of reporting.$)$

b$.$ For each item, determine whether it will appear as a positive or negative in determining the net

increase in cash and cash equivalents.

NORDSTROM, INC.

Consolidated Statement of Cash Flows$-$Selected Items

Decrease in accounts receivable

Capital expenditures

Proceeds from long$-$term borrowings

Increase in deferred income tax net liability

Principal payments on long$-$term borrowings

Increase in merchandise inventories

Increase in prepaid expenses and other assets

Proceeds from issuances under stock compensation plans

Increase in accounts payable

Net earnings

Payments for repurchase of common stock

Increase in accrued salaries, wages, and related benefits

Cash dividends paid

Depreciation and amortization expenses