Business Activities

Bill and Steve recently formed a company that manufactures and sells high$-$end kitchen appliances. The following is a list of activities that occurred during the year.

Required:

Classify each of the business activities listed as either an operating activity, an investing activity, or a financing activity.

a$.$ Bill and Steve each contributed cash in exchange for common stock in the company.

b$.$ Land and a building to be used as a factory to make the appliances were purchased for cash.

c$.$ Machines used to make the appliances were purchased for cash.

d$.$ Various materials used in the production of the appliances were purchased for cash.

e$.$ Three employees were paid cash to operate the machines and make the appliances.

f$.$ Running low on money, the company borrowed money from a local bank.

g$.$ The money from the bank loan was used to buy advertising on local radio and television stations.

h$.$ The company sold the appliances to local homeowners for cash.

i$.$ Due to extremely high popularity of its products, Bill and Steve built another factory building on its land for cash.

j$.$ The company paid a cash dividend to Bill and Steve.