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QUESTION 3 (20 MARKS) Classification of cash flows Indicate how each of the following events should be classified in a statement of cash flows for
QUESTION 3 (20 MARKS) Classification of cash flows Indicate how each of the following events should be classified in a statement of cash flows for the current calendar year. Use the following code: O = operating activities, I = investing activities, and F = financing activities 3. Assume this company uses the direct method. If the event does not involve a cash flow that should be included in the statement of cash flows, use an X. (a) Declared a dividend to be paid early next year. (b) Recorded depreciation expense for the current year, (c) At year-end, paid rent in advance for the next six months (d) Issued capital stock for cash; management plans to use this cash to invest in marketable securities. (e) Sold a parcel of unused land at a loss. (f) Collected principal amount due on a note receivable. (g) Used the cash received in d, above, to purchase marketable securities (h) Collected interest due on note receivable described in f, above. 0) Made an adjusting entry to accrue interest payable at year-end. Collected account receivable from a customer who made a large credit purchase in a prior period
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