Question
Question No. 2 (LO5) (6 marks) The major classifications of activities reported in the statement of cash flows are Operating (O), Investing (I), and Financing
Question No. 2 (LO5) (6 marks)
The major classifications of activities reported in the statement of cash flows are Operating (O), Investing (I), and Financing (F). Classify each of the transactions listed below as:
- Operating activityadd to net income.
- Operating activitydeduct from net income.
- Investing activity.
- Financing activity.
- Reported as significant non-cash activity in the notes to the financial statements.
The transactions are as follows.
| Transactions | Activity (O, I, F) | ADD or LESS + or - |
| Issuance of ordinary shares. |
|
|
| Purchase of land and building, |
|
|
| Redemption of bonds, |
|
|
| Sale of equipment |
|
|
| Depreciation of machinery. |
|
|
| Issuance of bonds for plant assets, |
|
|
| Payment of cash dividends, |
|
|
| Exchange of furniture for office equipment. |
|
|
| Purchase of treasury shares. |
|
|
| Loss on sale of equipment. |
|
|
| Increase in accounts receivables during the year, |
|
|
| Decrease in accounts payable during the year. |
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
