Please explain why the following activities are in the respective activities.

INSTRUCTIONS:

Classify each transaction as either

(A) an operating activity

(B) an investing activity

(C) a financing activity

(D) a noncash investing and financing activity.

Record only the letter for your answer in the blank for the corresponding section as instructed.

1. Common stock is sold for cash above par value.

2. Bonds payable are issued for cash at a discount.

3. Interest receivable on a short-term note receivable is collected.

4. Land is sold for cash at book value.

5. Accounts payable are paid in cash.

6. Equipment is purchased by signing a 3-year, 10% note payable.

7. Cash dividends on common stock are purchased for cash.

8 100 shares of XYZ common stock are purchased for cash.

9. Merchandise is sold to customers for cash.

10. Bonds payable are converted to compion stock.

1. C
2. C
3. A
4. B
5. A
6. D
7. C
8. B
9. A
10. D