Question
The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:
The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:
| 1. | Operating activity-add to net income. | |
|---|---|---|
| 2. | Operating activity-deduct from net income. | |
| 3. | Investing activity. | |
| 4. | Financing activity. | |
| 5. | Reported as significant noncash activity |
The transactions are as follows.
| Transactions | Classifications of Activities | |||
|---|---|---|---|---|
| (a) | Issuance of common stock. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (b) | Purchase of land and building. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (c) | Redemption of bonds. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (d) | Sale of equipment. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (e) | Depreciation of machinery. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (f) | Amortization of patent. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (g) | Issuance of bonds for plant assets. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (h) | Payment of cash dividends. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (i) | Exchange of furniture for office equipment. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (j) | Purchase of treasury stock. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (k) | Loss on sale of equipment. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (l) | Increase in accounts receivable during the year. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity | ||
| (m) | Decrease in accounts payable during the year. | select a classification Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
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Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
11th edition
78025400, 978-0078025402
