P12-1A You are provided with the following information regarding events that occ

Question

P12-1A You are provided with the following information regarding events that occurred at Moore Corporation during 2017 or changes in account balances as of December 31, 2017. Statement If Operating, Did It of Cash Increase or Decrease Flow Section Reported Cash from Affected Operating Activities? (a) Depreciation expense was $80,000 (b) Interest Payable account increased $5,000. (c) Received $26,000 from sale of plant assets. (d) Acquired land by issuing common stock to seller. (e) Paid $17,000 cash dividend to preferred stockholders. (f) Paid $4,000 cash dividend to common stockholders. (g) Accounts Receivable account decreased $10,000. (h) Inventory increased $2,000. (Gi) Received $100,000 from issuing bonds payable. (G) Acquired equipment for $16,000 cash.

Explanation / Answer

Answer:

1

(a)

Depreciation expense was $80,000.

(O)
Operating Activity

(A)
Added

(b)

Interest Payable account increased $5,000.

(O)
Operating Activity

(A)
Added

(c)

Received $26,000 from sale of plant assets.

(I)
Investing Activity

It will not affect the operating cash flow

(d)

Acquired land by issuing common stock to seller.

NC

No cash flow effect

(e)

Paid $17,000 cash dividend to preferred stockholders.

(F)
Financing Activity

It will not affect the operating cash flow

(f)

Paid $4,000 cash dividend to common stockholders.

(F)
Financing Activity

It will not affect the operating cash flow

(g)

Accounts Receivable account decreased $10,000.

(O)
Operating Activity

(A)
Added

(h)

Inventory increased $2,000.

(O)
Operating Activity

(D)
Substacted

(i)

Received $100,000 from issuing bonds payable.

(F)
Financing Activity

It will not affect the operating cash flow

(j)

Acquired equipment for $16,000 cash.

(I)
Investing Activity

It will not affect the operating cash flow

(a)

Depreciation expense was $80,000.

(O)
Operating Activity

(A)
Added

(b)

Interest Payable account increased $5,000.

(O)
Operating Activity

(A)
Added

(c)

Received $26,000 from sale of plant assets.

(I)
Investing Activity

It will not affect the operating cash flow

(d)

Acquired land by issuing common stock to seller.

NC

No cash flow effect

(e)

Paid $17,000 cash dividend to preferred stockholders.

(F)
Financing Activity

It will not affect the operating cash flow

(f)

Paid $4,000 cash dividend to common stockholders.

(F)
Financing Activity

It will not affect the operating cash flow

(g)

Accounts Receivable account decreased $10,000.

(O)
Operating Activity

(A)
Added

(h)

Inventory increased $2,000.

(O)
Operating Activity

(D)
Substacted

(i)

Received $100,000 from issuing bonds payable.

(F)
Financing Activity

It will not affect the operating cash flow

(j)

Acquired equipment for $16,000 cash.

(I)
Investing Activity

It will not affect the operating cash flow

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