The major classifications of activities reported in the statement of cash flows are operating, investing, and financing.
Question:
The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Below is a list of common transactions.
(a) Issuance of capital stock.
(b) Purchase of land and building.
(c) Redemption of bonds.
(d) Sale of equipment.
(e) Depreciation of machinery.
(f) Amortization of patent.
(g) Issuance of bonds for plant assets.
(h) Payment of cash dividends.
(i) Exchange of furniture for office equipment.
(j) Purchase of treasury stock.
(k) Loss on sale of equipment.
(l) Increase in accounts receivable during the year.
(m) Decrease in accounts payable during the year.
Instructions
Classify each of the transactions above as:
1. Operating activity—add to net income.
2. Operating activity—deduct from net income.
3. Investing activity.
4. Financing activity.
5. Not reported as a cash flow.
Step by Step Answer:
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso