15-25 Activity Classification

Stillwater Designs is a private company and outsources production of its Kicker speaker lines. Suppose that Stillwater Designs provided you the following transactions.

Required:

Classify each of these transactions as an operating activity, an investing activity, or a financing activity. Also, indicate whether the activity is a source of cash or a use of cash.

a. Sold a warehouse for $750,000.

b. Reported a profit of $100,000.

c. Retired long-term bonds.

d. Paid cash dividends of $350,000.

e. Obtained a mortgage for a new building from a local bank.

f. Purchased a new robotic system.

g. Issued a long-term note payable.

h. Purchased a 40% interest in a company.

i. Reported a loss for the year.

j. Negotiated a long-term loan.