1.

Classifying Cash Flows

Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:

a. Retirement of bonds payable	Financing
b. Purchase of inventory for cash
c. Cash sales
d. Repurchase of common stock
e. Payment of accounts payable
f. Disposal of equipment

2.

Adjustments to Net IncomeIndirect Method

Omni Corporation's accumulated depreciationequipment account increased by $9,600, while $6,200 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $7,300 from the sale of land.

Reconcile a net income of $109,600 to net cash flow from operating activities.

3.

Changes in Current Operating Assets and LiabilitiesIndirect Method

Victor Corporation's comparative balance sheet for current assets and liabilities was as follows:

	Dec. 31, Year 2		Dec. 31, Year 1
Accounts receivable	$23,900		$20,100
Inventory	60,200		67,600
Accounts payable	13,500		16,700
Dividends payable	19,000		18,000

Adjust net income of $79,700 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. $