Problem 2 – 30 Points Each of the events below may have an effect on the stateme

Question

Problem 2 – 30 Points

Each of the events below may have an effect on the statement of cash flows. Designate how the event should be reported within the statement of cash flows using the codes provided below. Codes may be used more than once, or not at all.



Codes

A. Investing activity; cash inflow

B. Investing activity; cash outflow

C. Financing activity; cash inflow

D. Financing activity; cash outflow

E. Operating activity; cash inflow

F. Operating activity; cash outflow

G. Noncash investing and financing activity

Events



_____ 1. Paid the weekly payroll



_____ 2. Paid an account payable



_____ 3. Issued bonds payable for cash



_____ 4. Declared and paid a cash dividend



_____ 5. Paid cash for a new piece of equipment



_____ 6. Purchased treasury stock for cash



_____ 7. Paid cash for stock in another company



_____ 8. Received interest on a long-term bond investment



_____ 9. Received cash for sales



_____ 10. Sold a long-term stock investment for cash at book value

Explanation / Answer

F 1. Paid the weekly payroll F 2. Paid an account payable C 3. Issued bonds payable for cash D 4. Declared and paid a cash dividend B 5. Paid cash for a new piece of equipment D 6. Purchased treasury stock for cash B 7. Paid cash for stock in another company E 8. Received interest on a long-term bond investment E 9. Received cash for sales A 10. Sold a long-term stock investment for cash at book value

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