Question 2

Classifying Cash Flow Activities

Sonic Company had the following activities during the current year ended December 31, 2020. Assuming that the company uses the indirect method for the statement of cash flows, classify each activity as follows:

a. Operating activityadd to net income

b. Operating activitysubtract from net income

c. Investing activitycash inflow

d. Investing activitycash outflow

e. Financing activitycash inflow

f. Financing activitycash outflow

g. Noncash transaction

1. Purchased treasury stock.	Answerabcdefg
2. Issuance of finance lease liability for equipment.	Answerabcdefg
3. Depreciation expense on equipment.	Answerabcdefg
4. Loss on sale of land.	Answerabcdefg
5. Increase in accounts receivable.	Answerabcdefg
6. Increase in accounts payable.	Answerabcdefg
7. Pension expense in excess of cash funded to plan.	Answerabcdefg
8. Exchange of common stock for a building.	Answerabcdefg
9. Unrealized gainincome on equity securities.	Answerabcdefg
10. Increase in a current deferred tax asset.	Answerabcdefg
11. Decrease in deferred tax liability.	Answerabcdefg
12. Issued a short-term nontrade note payable for cash.	Answerabcdefg
13. Amortization expense on discount for a bond payable.	Answerabcdefg
14. Excess of the companys share of its investees net income over the	Answerabcdefg
companys share of dividend payments (accounted for under the equity method).
15. Decrease in interest payable.	Answerabcdefg
16. Decrease in prepaid expenses.	Answerabcdefg
17. Decrease in income taxes payable.	Answerabcdefg
18. Exchange of currently held equipment with replacement equipment.	Answerabcdefg
19. Proceeds from sale of a business segment.	Answerabcdefg
20. Purchase of land for cash.	Answerabcdefg