Question

1 Approved Answer

Posted on Sep 09, 2024

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations. Classify the items as (1) operatingadd to net income;

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations. Classify the items as (1) operatingadd to net income; (2) operatingdeduct from net income; (3) investing; (4) financing; or (5) significant noncash investing and financing activities. Use the indirect method.

Items

(a)

Purchase of equipment.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(b)

Redemption of bonds payable.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(c)

Sale of building.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(d)

Depreciation.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(e)

Exchange of equipment for furniture.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(f)

Issuance of common stock.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(g)

Amortization of intangible assets.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(h)

Purchase of treasury stock.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(i)

Issuance of bonds for land.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(j)

Payment of dividends.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(k)

Increase in interest receivable on notes receivable.

select a kind of activity OperatingAdd to Net IncomeFinancing ActivityInvesting ActivityOperatingDeduct from Net IncomeSignificant Noncash Investing and Financing Activity

(l)

Pension expense exceeds amount funded.