Concept explainers
Classification of cash flows
• LO21–3 through LO21–6
Listed below are several transactions that typically produce either an increase or a decrease in cash. Indicate by letter whether the cash effect of each transaction is reported on a statement of cash flows as an operating (O), investing (I), or financing (F) activity. Transactions
___F_ 1. Sale of common stock
_____ 2. Sale of land
_____ 3. Purchase of
_____ 4. Merchandise sales
_____ 5. Issuance of a long-term note payable
_____ 6. Purchase of merchandise
_____ 7. Repayment of note payable
_____ 8. Employee salaries
_____ 9. Sale of equipment at a gain
_____ 10. Issuance of bonds
_____ 11. Acquisition of bonds of another corporation
_____ 12. Payment of semiannual interest on bonds payable
_____ 13. Payment of a cash dividend
_____ 14. Purchase of a building
_____ 15. Collection of nontrade note receivable (principal amount)
_____ 16. Loan to another firm
_____ 17. Retirement of common stock
_____ 18. Income taxes
_____ 19. Issuance of a short-term note payable
_____ 20. Sale of a copyright
Want to see the full answer?
Check out a sample textbook solutionChapter 21 Solutions
Intermediate Accounting, 10 Ed
Additional Business Textbook Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Fundamentals of Cost Accounting
Principles of Accounting Volume 2
Intermediate Accounting (2nd Edition)
Auditing and Assurance Services (16th Edition)
- MC Qu. 12-40 Which of the following would be... Which of the following would be classified as an operating activity on the statement of cash flows using the direct method? Multiple Cholce Cash dividends pald. Cash recelved from selling equlpment. Cash pald to retire bonds payable at maturity. Cash recelved from accounts recelvable collections. < Prev 30 of 30 Next Type here to search W Trop storm warning DELLarrow_forward23 Which transaction should be included in the operating activities section of the statement of cash flows? Receipt of cash from the sale of property Payment of cash interest Receipt of cash from the sale of stock Payment of cash dividends NEXT > BOOKMARKarrow_forwardIncrease in notes receivable is reported as ?cash flow from "operating" activities اخترأحد الخيارات a. False O b. True Oarrow_forward
- QUESTION 12 When using the indirect method to determine operating cash flows, how would the retirement of bonds payable at their maturity date be shown on the statement of cash flows? a. an investing activity b. not reported on the statement of cash flows c. a noncash investing and financing activity d. an operating activity e. a financing activityarrow_forwardProblem 11-1A (Static) Determine proper classification (LO11-1) Listed below are several transactions. For each transaction, indicate whether the cash effect of each transaction is reported in a statement of cash flows as an operating, investing, financing, or noncash activity. Also, indicate whether the transaction is a cash inflow or cash outflow, or has no effect on cash. The first answer is provided as an example. Transaction 1. Payment of employee salaries. 2. Sale of land for cash. 3. Purchase of rent in advance. 4. Collection of an account receivable. 5. Issuance of common stock. 6. Purchase of inventory. 7. Collection of notes receivable. 8. Payment of income taxes. 9. Sale of equipment for a note receivable. 10. Issuance of bonds. 11. Loan to another company. 12. Payment of a long-term note payable. 13. Purchase of treasury stock. 14. Payment of an account payable. 15. Sale of equipment for cash. Type of Activity Operating Cash Inflow or Outflow Cash outflowarrow_forwardClassifying cash flows Obj. 1Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: Purchase of investments Disposal of equipment Payment for selling expenses Collection of accounts receivable Cash sales Issuance of bonds payablearrow_forward
- Question 8 of 20 View Policies Current Attempt in Progress O O When preparing a statement of cash flows, the following are used for which method in determining cash flows from operating activities? Direct Indirect Net Accounts Receivable Direct Indirect Indirect -/1 Direct !!!arrow_forwardIn an statement of cash flows what is included in the operating activities section? In the investment section? In the financial activities section? One or two paragraph minimum per section CH 15arrow_forwardHelp Save & Exit Which of the following items do we report in the statement of cash flows using the direct method? Multiple Choice 39 19 Depreciation expense. Cash paid to suppliers. Gain on sale of an asset. Loss on sale of an asset. C raw hparrow_forward
- Question 42 Which of the following is considered a use of cash in a cash flow statement? Increase in accrued wages Increase in common stock Decrease in accounts receivable Decrease in inventory Increase in fixed assetsarrow_forwardClassifying items on the indirect statement of cash flows The statement of cash flows categorizes like transactions for optimal reporting. Identify each item as a(n): • Operating activity—addition to net income (O+) or subtraction from net income (O–) • Investing activity—cash inflow (I+) or cash outflow (I–) • Financing activity—cash inflow (F+) or cash outflow (F–) • Non-cash investing and financing activity (NIF) • Activity that is not used to prepare the indirect statement of cash flows (N) The indirect method is used to report cash flows from operating activities. a. Loss on sale of land. b. Acquisition of equipment by issuance of note payable. c. Payment of long-term debt. d. Acquisition of building by issuance of common stock. e. Increase in Salaries Payable. f. Decrease in Merchandise Inventory. g. Increase in Prepaid Expenses. h. Decrease in Accrued Liabilities. i. Cash sale of land. j. Issuance of long-term note payable to borrow cash. k. Depreciation Expense. l. Purchase of…arrow_forwardnu messageQ&A notifications account_circle Business FinanceQ&A LibraryPlease classify each of the following accounts into its right category of cash flow activities. Which of the following item(s) belong to Operation Activities? (This question may contain multiple answers) Depreciation Fixed assets expenses Change in Inventories Change in Accounts Payable Payment of cash dividends Change in Notes Payable Payment of long-term debt Change in marketable securities Net income Change in Account Receivables Please classify each of the following accounts into its right category of cash flow activities. Which of the following item(s) belong to Operation Activities? (This question may contain multiple answers) Depreciation Fixed assets expenses Change…arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning