Stillwater Designs is a private company and outsources production of its Kicker speaker lines. Suppose that Stillwater Designs provided you the following transactions:
Required:
Classify each of these transactions as an operating activity, an investing activity, or a financing activity. Also, indicate whether the activity is a source of cash or a use of cash.
Identify the transactions as an operating, investing and financing activity. Also, state whether the transaction is a source of cash or is a use of cash.
Cash Flows from Operating Activities:
This category of a cash flow statement shows the operational and profit generating activities in a firm. The operating cash flows increase or decrease the current assets and current liabilities of a firm.
Cash Flows from Investing Activities:
This category of a cash flow statement shows the investing activities which involves the purchase or sale of long-term assets. This includes acquiring new asset or acquiring stock in another company.
Cash Flows from Financing Activities:
This category of a cash flow statement includes those activities which help a company to raise cash from creditors and owners. Financing activities basically show those activities that are required to fund a company.
The classification of the transactions as operating, investing and financing activity and as source of cash or use of cash is shown in the table below:
Serial No. | Transaction | Type of activity | Source of cash or use of cash |
a. | A warehouse sold for $750,000... |
Financial And Managerial Accounting
Financial Accounting
Accounting Information Systems
College Accounting, Chapters 1-27
Financial & Managerial Accounting
Corporate Financial Accounting
Intermediate Accounting: Reporting And Analysis
Management, Loose-Leaf Version
Foundations of Business (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Principles of Economics (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
MKTG 12:STUDENT ED.-TEXT
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Essentials of Economics (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Accounting Information Systems
Principles of Microeconomics (MindTap Course List)
Contemporary Marketing
Financial & Managerial Accounting
Financial Accounting
College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Accounting (Text Only)
Fundamentals of Financial Management (MindTap Course List)
Statistics for Business & Economics, Revised (MindTap Course List)
Exploring Economics
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Pkg Acc Infor Systems MS VISIO CD
Corporate Financial Accounting
Survey of Accounting (Accounting I)
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Practical Management Science
Economics (MindTap Course List)
Macroeconomics
Economics For Today
Purchasing and Supply Chain Management
Microeconomics
Cornerstones of Cost Management (Cornerstones Series)