Ragsdell Corporation had the following transactions. Classify each of these tran

Question

Ragsdell Corporation had the following transactions.

Classify each of these transactions by type of cash flow activity (operating, investing, or financing).

1.

Issued $200,000 of bonds payable.

2.

Paid utilities expense.

3.

Issued 500 shares of preferred stock for $45,000.

4.

Sold land and a building for $250,000.

5.

Lent $30,000 to Tegtmeier Corporation, receiving Tegtmeier’s 1-year, 12% note

1.

Issued $200,000 of bonds payable.

2.

Paid utilities expense.

3.

Issued 500 shares of preferred stock for $45,000.

4.

Sold land and a building for $250,000.

5.

Lent $30,000 to Tegtmeier Corporation, receiving Tegtmeier’s 1-year, 12% note

Explanation / Answer

Lent $30,000 to Tegtmeier Corporation, receiving Tegtmeier’s 1-year, 12% note

Ragsdell Corporation Transaction Type of Cash flow activity 1 Issued $200,000 of bonds payable. Cash Flow from Financing Activity 2 Paid utilities expense. Cash Flow from Operating Activity 3 Issued 500 shares of preferred stock for $45,000. Cash Flow from Financing Activity 4 Sold land and a building for $250,000. Cash flow from Investing Activity 5

Lent $30,000 to Tegtmeier Corporation, receiving Tegtmeier’s 1-year, 12% note

Cash flow from Investing activity if providing loan is not the main activity, Otherwise Cash flow from Operating Activity.

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