17E - Horngren'S Financial And Managerial Accounting

Question

Classifying transactions on the statement of cash flows—indirect method Consider the following transactions:

 

Identify the category of the statement of cash flows, indirect method, in which each transaction would be reported.

 

Step-by-Step Solution

Answer

1. Financing
2. Investing
3. Operating
4. Investing
5. Operating
6. Financing
7. Non-cash
8. Investing
9. Financing
10. Non-cash
11. Investing

 

Classification of operating activities

c. Sales revenue of $88,000 is an operating activity.

e. Depreciation expense of $6,800 is an operating activity.

Classification of investing activities

b. Treasury stock sold for $16,500 is an investing activity.

d. Land purchased for cash $103,000 is an investing activity.

h. Equipment sold for $9,600 is an investing activity.

k. Loss of $1,800 on disposal of equipment is an investing activity.

Classification of financing activities

a. Issuance of common stock for cash of $72,000 is a financing activity.

f. Cash paid for dividends is a financing activity.

i. Bonds payable of $51,000 is a financing activity

Classification of non-cash activities

g. Land in exchange of notes payable is a non-cash activity.

j. Building in exchange of notes payable is a non-cash activity