(Classifying transactions for a cash flow statement, LO 3) Mamalilaculla Ltd.

(Mamalilaculla) is a small retail jewellery store. For each of the following, specify whether the item should be classified as an operating, financing, or investing cash flow, whether the item represents a cash inflow or outflow, and the amount of the transaction. Explain your reasoning.

a. Mamalilaculla paid $20,000 cash for a shipment of cut diamonds for engagement rings.

b. Mamalilaculla’s amortization expense for the year was $8,000.

c. Mamalilaculla purchased new display cases for the store for $13,500 cash.

d. Mamalilaculla sold a number of old display cases for $3,500. The loss on the sale of the display cases was $2,000.

e. Mamalilaculla sold a pendant to a customer for $2,000. The customer paid with a Visa credit card.

f. Mamalilaculla’s shareholder purchased additional shares of the corporation for

$100,000. The cash will be used to purchase additional inventory.

g. Mamalilaculla repaid a $50,000 loan from the bank.