Each of the events below may have an effect on the statement of cash flows. Desi

Question

Each of the events below may have an effect on the statement of cash flows. Designate how the event should be reported within the statement of cash flows using the letters below. A selection may be used more than once or not at all.

Answer Choices:

A. Investing activity; cash inflow

B. Investing activity; cash outflow

C. Financing activity; cash inflow

D. Financing activity; cash outflow

E. Operating activity; cash inflow

F. Operating activity; cash outflow

G. Noncash investing and financing activity

Please answer either A, B, C, D, E, F, or G for each response.

Event Scenarios

1. Issued checks for the weekly payroll

2. Paid an accounts payable balance

3. Issued notes payable for cash

4. Declared and paid a cash dividend

5. Paid cash for a new delivery truck

6. Purchased treasury stock for cash

7. Paid cash for a 12% interest in another company

8. Received interest on a long-term note receivable

9. Converted bonds payable into common stock

10. Received cash proceeds from the sale of equipment at book value

Explanation / Answer

Event Answer 1. Issued checks for weekly payroll F. Operating activities-Cash outflow 2. Paid an account payable balance F. Operating activities-Cash outflow 3. Issued notes payable for cash F. Operating activities-Cash outflow 4. Declared and paid a cash dividend D. Financing activities-Cash outflow 5. Paid cash for a new delivery truck B. Investing activities-Cash outflow 6. Purchased treasuryt stock for cash D. Financing activities-Cash outflow 7. paid cash fr 12% in another company B. Investing activities-Cash outflow 8. Received interest on long term notes payable E. Operating activities-Cash inflows 9. Converted bonds payable into common Stock G. Non cash investing and financing activities 10. Received cash proceeds from sale of equipment A. Investing activities-Cash inflows

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