c. A $500,000 loan is received from the bank.

d. Office furniture is purchased for $20,000 to furnish the president’s office.

e. Four delivery trucks are sold for $22,500.

f. Common shares are sold to investors for $500,000.

(Classification of cash flows, LO 1) During 2005 Argyle & Chester, a partnership, entered into the following cash transactions. Classify each transaction as an operating, financing, or investing cash flow. Explain your thinking in each case.

a. Payments of $30,000 are received from clients.

b. The two partners take drawings of $10,000 each for personal expenses.

c. Land is purchased for $250,000 as the site of Argyle & Chester’s new office building.

d. The $3,000 phone bill is paid.

e. Insurance for the next two years costing $8,000 is purchased.

f. Old computer equipment is sold for $7,500.