Textbook Problem

Exercise 1-34 Business Activities

Bill and Steve recently formed a company that manufactures and sells high-end kitchen appliances. The following is a list of activities that occurred during the year.

1. Bill and Steve each contributed cash in exchange for common stock in the company
2. Land and a building to be used as a factory to make the appliances were purchased for cash.
3. Machines used to make the appliances were purchased for cash.
4. Various materials used in the production of the appliances were purchased for cash.
5. Three employees were paid cash to operate the machines and make the appliances.
6. Running low on money, the company borrowed money from a local bank.
7. The money from the bank loan was used to buy advertising on local radio and television stations.
8. The company sold the appliances to local homeowners for cash.
9. Due to extremely high popularity of its products, Bill and Steve bum another factory building on its land for cash.
10. The company paid a cash dividend to Bill and Steve

Required:

Classify each of the business activities listed as either an operating activity (0). an investing activity (I), or a financing activity (F).