How should prchases, sales, and depreciation of plant assets be classified in a statement of cash flows for the current year? (Assume the direct method is used). Purchases of plant assets are classified as investing activities; sales of plant assets are classified as financing activities; depreciation is classified as an operating activity. Purchases and sales of plant assets are classified as investing activities; depreciation does not appear as an operating, financing, or investing activity. Purchases of plant assets and depreciation are classified as investing activities; sales of plant assets are classified as financing activities. Since plant assets are used to generate income from operations, purchases, sales, and depreciation of plant assets are all classified as operating activities