Problem #3 Classifications of Cash Flows

Assuming a statement of cash flows is prepared, indicate the reporting of the transactions and events listed below by major categories on the statement. Use the following code letters to indicate the appropriate category under which the item would appear on the statement of cash flows.

Code

Cash Flows From Operating Activities

Add to Net Income NCO-Add

Deduct from Net Income NCO-Ded

Cash Flows From Investing Activities I

Cash Flows From Financing Activities F

Significant Non-Cash Investing and Financing Activities

Category

1. Common stock is issued for cash at an amount above par value.

2. Merchandise inventory increased during the period.

3. Depreciation expense recorded for the period.

4. Building was purchased for cash.

5. Bonds payable were acquired and retired at their carrying value.

6. Accounts payable decreased during the period.

7. Prepaid expenses decreased during the period.

8. Treasury stock was acquired for cash.

9. Land is sold for cash at an amount equal to book value.

10. Patent amortization expense recorded for a period.