Use the following codes to indicate how the cash flow effect, if any, of each tr

Question

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may he used more than once.) Operating activity-add to net income Operating activity-deduct from net income Inflow from investing activity Outflow from investing activity Inflow from financing activity Outflow from financing activity Noncash investing and financing activity Not reported on statement of cash flows Purchased land for cash Issued a twenty-year mortgage note for cash Increase in the inventory balance Sold treasury stock for cash Increase in the unearned revenue balance Issued stock to buy a building Declared cash dividends Paid cash dividends Received cash from the sale of securities Recognized a gain on the sale of securities Recorded depreciation expenses for the year Issued long-term bonds

Explanation / Answer

11. Purchase of Land for cash d. Outflow from investing activity

12. Issued a twenty-year mortgage note for cash c. Inflow from financing activity

13. Increase in Inventory Balance b. Operating activity-- dedtuct from net income

14. sold treasury cash for cash e. Inflow from Financial activity

15.increase in unearned revenue balance g. Noncash investing or financing activity

16. Issued stock to buy a building h. Not reported in the cash flows

17. Declared cash dividends g. Noncash investing or financing activity

18. Paid cash Dividends f. Outflow from financing activity

19. received cash from sale of securities e. Inflow from Financial activity

20. recognized a gain on sale of securities g. Noncash investing or financing activity

21. Recorded depreciation expences for the year   h. Not reported in the cash flows

22. Issued Long term bonds   e. Inflow from Financial activity

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