Question
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. |
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Only The Strongest Women Become Auditors
Authors: Auditor Publishing
1st Edition
1660768675, 978-1660768677
