Question
Complete the table indicating whether each item (1) should bereported as an operating (O) activity, investing (I) activity,financing (F) activity, or as a noncash (NC) transaction reportedin a separate schedule, and (2) represents a cash inflow or cashoutflow or has no cash flow effect. Assume use of the indirectapproach.
Transaction
WhereReported
on Statement
Cash Inflow,Outflow,
or No Effect?
Transaction
WhereReported
on Statement
Cash Inflow,Outflow,
or No Effect?
(a) Recordeddepreciation expense on the plant assets. NCFOI Cash outflowCash inflowNo cash flow effect
(b) Recorded and paid interestexpense. FIONC Cash outflowNo cash flow effectCash inflow
(c) Recorded cashproceeds from a sale of plant assets. FIONC Cash inflowNo cash flow effectCash outflow
(d) Acquired land by issuing commonstock. FNCIO No cash flow effectCash outflowCash inflow
(e) Paid a cash dividendto preferred stockholders. FONCI No cash flow effectCash inflowCash outflow
(f) Distributed a stock dividend to commonstockholders. IFNCO Cash outflowNo cash flow effectCash inflow
(g) Recorded cashsales. FOINC Cash outflowNo cash flow effectCash inflow
(h) Recorded sales on account. FIONC No cash flow effectCash outflowCash inflow
(i) Purchased inventoryfor cash. IFNCO Cash inflowCash outflowNo cash flow effect
(j) Purchased inventory on account. NCIFO No cash flow effectCash outflowCash inflow You are provided with the following transactions that took placeduring a recent fiscal year. Complete the table indicating whether each item (1) should bereported as an operating (O) activity, investing (I) activity,financing (F) activity, or as a noncash (NC) transaction reportedin a separate schedule, and (2) represents a cash inflow or cashoutflow or has no cash flow effect. Assume use of the indirectapproach. Transaction WhereReported on Statement Cash Inflow,Outflow, or No Effect? (a) Recordeddepreciation expense on the plant assets. (b) Recorded and paid interestexpense. (c) Recorded cashproceeds from a sale of plant assets. (d) Acquired land by issuing commonstock. (e) Paid a cash dividendto preferred stockholders. (f) Distributed a stock dividend to commonstockholders. (g) Recorded cashsales. (h) Recorded sales on account. (i) Purchased inventoryfor cash. (j) Purchased inventory on account
Explanation / Answer
a. No CF effect b. C Outflow c. Cash Inflow d. No CF effect e. Cash Outflow f. Cash Outflow g. Cash Inflow h. Cash outflow i. Cash outflow j. Cash Inflow
