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Classification of Transactions Consider the following independent activities. Required: Classify the following transaction as operating activities, investing activities, financing activities, or financing/investing not affecting cash.
Classification of Transactions
Consider the following independent activities.
Required:
Classify the following transaction as operating activities, investing activities, financing activities, or financing/investing not affecting cash. If an activity is an operating activity, indicate whether it will be added to or deducted from net income to compute cash from operations.
a. Payment of a cash dividend | |
b. Amortization of intangible asset | |
c. Gain on disposal of equipment | |
d. Exchange of common stock for land | |
e. Increase in accrued wages | |
f. Retirement of preferred stock | |
g. Purchase of a new plant | |
h. Depreciation expense | |
i. Decrease in accounts payable | |
j. Increase in accounts receivable | |
k. Proceeds from the sale of land | |
l. Increase in prepaid expenses | |
m. Retirement of a bond | |
n. Purchase of a 60% interest in another company 5 choices for each transaction: a) financing activities b)investing activities c)noncash financing/investing activities d)operating activities-added to net income e)Operating activities-deducted from net income |
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