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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 |
| Transactions | Classifications of Activities | |
| (a) | Issuance of common stock. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (b) | Purchase of land and building. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (c) | Redemption of bonds | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (d) | Sale of equipment. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (e) | Depreciation of machinery. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (f) | Amortization of patent. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (g) | Issuance of bonds for plant assets. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (h) | Payment of cash dividends. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (i) | Exchange of furniture for officeequipment. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (j) | Purchase of treasury stock. | Financing ActivityInvesting ActivityOperating Activity-Add to Net IncomeOperating Activity-Deduct from Net IncomeReported as Significant Noncash Activity |
| (k) | Loss on sale of equipment. | 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. | 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 |
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Intermediate Accounting
Authors: kieso, weygandt and warfield.
14th Edition
9780470587232, 470587288, 470587237, 978-0470587287
