You are provided with the following transactions that took place during a __ Distinguish among recent fiscal year. operating, investing, and financing activities.

(SO 2)

Cash Inflow, Where Reported Outflow, or Transaction on Statement No Effect?

(a) Recorded depreciation expense on the plant assets.

(b) Incurred a loss on disposal of plant assets.

(c) Acquired a building by paying cash.

(d) Made principal repayments on a mortgage.

(e) Issued common stock.

(f) Purchased shares of another company to be held as a long-term equity investment.

(g) Paid dividends to common stockholders.

(h) Sold inventory on credit. The company uses a perpetual inventory system.

(i) Purchased inventory on credit.

(j) Paid wages to employees.

Instructions Complete the table indicating whether each item (1) should be reported as an operating

(O) activity, investing (I) activity, financing (F) activity, or as a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.

634 CHAPTER 12. Statement of Cash Flows Determine cash flow effects