AC 599Solutions to Unit 2 Simulation

Correct classification of cash flows is critical to the accurate reporting of cash flow information. Categorized cash flow information is more useful than a mere listing of cash flows in random order. In the table below, determine the cash flow classification which applies to each item by double clicking on the shaded box in the cash flow classification column and selecting one or more classifications. A particular classification may be used once, more than once, or not at all.

Item

Cash Flow Classification

Payments to suppliers

Interest payments

Payments to retire bonds outstanding

Down payment on purchase of equipment

Obtain loan to purchase land to be held as an investment

Purchase of treasury stock

Depreciation expense

Purchase of trading securities

Monthly mortgage payment*

Dividends received on investments

Loss on disposal of equipment

Proceeds from sale of securities available for sale

Annual lease payment on capital lease*

Payments to fund company pension plan

Increase in accounts receivable for the period

Fill in with one of the following (Some may or may not be used):

Operating Cash Flow

Investing Cash Flow

Financing Cash Flow

Operating cash flow and Financing cash flow

Not a cash flow