The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each ofthe transactions listed below as:1.Operating activity-add to net income.2.Operating activity-deduct from net income.3.Investing activity.4.Financing activity.5.Reported as significant non-cash activity in the notes to the financial statements.The transactions are as follows.TransactionsClassifications of Activities(a)Issuance of ordinary shares.(b)Purchase of land and building.(c)Redemption of bonds.(d)Sale of equipment. (b)Purchase of land and building.(c)Redemption of bonds.(d)Sale of equipment.(e)Depreciation of machinery.(f)Amortization of patent.(g)Issuance of bonds for plant assets.(h)Payment of cash dividends.(i)Exchange of furniture for office equipment.G)Purchase of treasury shares.(k)Loss on sale of equipment.(1)Increase in accounts receivable during the year.(m)Decrease in accounts payable during the year.

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r classifications of activities reported in the statement of cash flows

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 1P: Classification of Cash Flows A company's statement of cash flows and the accompanying schedule of...

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Question

The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of
the transactions listed below as:
1.
Operating activity-add to net income.
2.
Operating activity-deduct from net income.
3.
Investing activity.
4.
Financing activity.
5.
Reported as significant non-cash activity in the notes to the financial statements.
The transactions are as follows.
Transactions
Classifications of Activities
(a)
Issuance of ordinary shares.
(b)
Purchase of land and building.
(c)
Redemption of bonds.
(d)
Sale of equipment.

(b)
Purchase of land and building.
(c)
Redemption of bonds.
(d)
Sale of equipment.
(e)
Depreciation of machinery.
(f)
Amortization of patent.
(g)
Issuance of bonds for plant assets.
(h)
Payment of cash dividends.
(i)
Exchange of furniture for office equipment.
G)
Purchase of treasury shares.
(k)
Loss on sale of equipment.
(1)
Increase in accounts receivable during the year.
(m)
Decrease in accounts payable during the year.

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