The following is a list of transactions that took place during the year:

Instructions
(a) Classify each of the above transactions as an operating activity (O), investing activity (I), financing activity (F), or non cash investing and financing activity (NC). If it does not fit into one of these classifications, indicate that there is no effect (NE). The first one has been done for you as an example.
(b) Specify if the transaction will result in a cash receipt (+), cash payment (-), or have no effect on cash (NE).
(c) Indicate if the transaction will increase (+), decrease (-), or have no effect (NE) on profit.
(d) Explain how it is possible for the same transaction to affect cash and profit differently?

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Profit NE Classification Cash Flow 1. Collected an account receivable. 2. Sold equipment for cash, at a loss. 3. Recorded an unrealized gain on a trading investment 4. Acquired land by issuing common shares. 5. Expired prepaid insurance. 6. Paid dividends to preferred shareholders. 7. Recorded depreciation expense. 8. Issued preferred shares for cash. 9. Purchased inventory for cash. The company uses a perpetual inventory system. 10. Provided services on account