Statement of cash flows contains the following sections: a. net cash flow from o

Question

Statement of cash flows contains the following sections:

a. net cash flow from operating activies

b. cash flows from investing activites

c. cash flows from financing activities

d. investing and financing activities NOT affecting cash

A list of items that appear on the statement is provided below:

_____ 1. Depreciation Expense

_____ 2. Proceeds from sale of land on gain (two solutions)

_____ 3. Decrease in accounts payable

_____ 4. Conversion of bonds to common stock

_____ 5. Payment of dividends, declared last fiscal year

_____ 6. Proceeds from issuance of short-term note payable, NOT relating to operating activities

_____ 7. Loss on cash sale of equipment (two solutions)

_____ 8. Payment for purchase of a building

_____ 9. Bond premium amortization using the effective interest method

_____ 10. Issuance of common stock to convert bonds payable

REQUIRED:

In the space provided, using the letter (a-d), indicate in which section(s) of the statement of cash flows (or accompanying schedule) the preceeding items would most likely be classified. After each items affecting cash, indicate with a plus sign (+) or a minus sign (-) whether the item would be reported as an increase (inflow) or a decrease (outflow).

Explanation / Answer

A list of items that appear on the statement is provided below:

1. a +

2. b +, a -

3. a -

4. d

5. c -

6. c +

7. a +, b +

8. b -

9. a -

10. d

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