Complete each of the columns on the table below, indicating in which section eac

Question

Complete each of the columns on the table below, indicating in which section each item would be reported on the statement of cash flows (operating, investing, or financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For item that affect more than one section of the statement, indicate all affected. Assume the indirect method of reporting cash flows from operating activities. Enter all amounts as positive numbers.

The first item has been completed as an example.

Item Statement Section Amount to Report +/- Effect on Cash Depreciation of $15,000 for the period Operating $15,000 Increase Issuance of common stock for $35,000 $ Increase in accounts payable of $7,000 $ Retirement of $100,000 Bonds Payable at 97 $ $ Purchase of long-term investments for $94,500 $ Dividends declared and paid of $8,300 $ Increase in Prepaid Rent of $4,500 $ Decrease in Inventory of $5,300 $ Purchase of equipment for $17,600 cash $ Sale of land originally costing $134,000 for $130,000 $ $ Decrease in taxes payable of $2,100 $

Explanation / Answer

Solution :-

Particulars Statement Section Amount to Report($) Cash Increase/ Decrease Depreciation of $15,000 for the period Operating 15000 Increase Issuance of common stock for $35,000 Financing 35000 Increase Increase in accounts payable of $7,000 Operating 7000 Increase Retirement of $100,000 Bonds Payable at 97 Operating 3000 Increase Financing 97000 Decrease Purchase of long-term investments for $94,500 Investing 94500 Decrease Dividends declared and paid of $8,300 Financing 8300 Decrease Increase in Prepaid Rent of $4,500 Operating 4500 Decrease Decrease in Inventory of $5,300 Operating 5300 Increase Purchase of equipment for $17,600 cash Investing 17600 Decrease Sale of land originally costing $134,000 for $130,000 Operating 4000 Increase Inveating 130000 Increase Decrease in taxes payable of $2,100 Operating 2100 Decrease

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