Question: Below are several transactions that took place in Mohawk Company last year: a. Bonds were retired by paying the principal amount due. b. Equipment was
Below are several transactions that took place in Mohawk Company last year:
a. Bonds were retired by paying the principal amount due.
b. Equipment was purchased by giving a long-term note to the seller.
c. Interest was paid on a note, decreasing Interest Payable.
d. Accrued taxes were paid, reducing Taxes Payable.
e. A long-term loan was made to a supplier.
f. Interest was received on the long-term loan in (e) above, reducing Interest Receivable.
g. Cash dividends were declared and paid.
h. A building was acquired in exchange for shares of the companys common stock.
i. Common stock was sold for cash to investors.
j. Equipment was sold for cash.
k. Equipment was sold in exchange for a long-term note.
l. Convertible bonds were converted into common stock.
Required:
Prepare an answer sheet with the following headings:
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Enter the transactions above on your answer sheet and indicate how each of them would be classified on a statement of cash flows. As appropriate, place an X in the Operating, Investing, or Financing column. Then indicate whether the transaction would be classified as a source, use, or neither. Finally, indicate if the transaction would be reported in a separate schedule rather than in the statement of cash flowsitself.
Source, Reported Use, in Separate Transaction Operating Investing Financing or Neither Schedule? Activity a. b. Etc.
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