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Q17E

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Horngren'S Financial And Managerial Accounting
Found in: Page 775

Short Answer

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.

  1. Financing
  2. Investing
  3. Operating
  4. Investing
  5. Operating
  6. Financing
  7. Non-cash
  8. Investing
  9. Financing
  10. Non-cash
  11. Investing
See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Classification of operating activities

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

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

Step 2: 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.

Step 3: 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

Step 4: 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.

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