Assuming a statement of cash flows is prepared indicates the reporting of the tr

Question

Assuming a statement of cash flows is prepared indicates the reporting of the transactions and events listed below by major categories on the statement. Use the following code letters to indicate the appropriate category under which the item would appear on the statement of cash flows.

Title

Code

Cash Flows From Operating   Activities Add to Net Income

A

Deduct from Net Income

D

Cash flows Investing Activities

IA

Cash Flows From Financing Activities

FA

1.  Patent amortization expense recorder for a period?

2. Land is sold for cash at an amount equal to book value?

3. Treasury stock was acquired for cash?

4.  Accounts payable decreased during the period?

5. Prepaid expense decreased during the period?

6.  Bonds payable were acquired ad retired at their carrying value?

7.  Building was purchased for cash?

8.  Depreciation expense recorded for the period?

9.  Merchandise inventory increased during the period?

10.  Common stock is issued for cash at an amount above par value?

Please provide the corresponding letter to the appropriate category.  Gracias!!

  

Title

     

Code

     

Cash Flows From Operating   Activities Add to Net Income

     

A

     

Deduct from Net Income

     

D

     

Cash flows Investing Activities

     

IA

     

Cash Flows From Financing Activities

     

FA

  

Explanation / Answer

Hi,

Please find the answer as follows:

Thanks.

1. Patent amortization expense recorded for a period A 2. Land is sold for cash at an amount equal to book value IA 3. Treasury stock was acquired for cash FA 4. Accounts payable decreased during the period D 5. Prepaid expense decreased during the period A 6. Bonds payable were acquired ad retired at their carrying value FA 7. Building was purchased for cash IA 8. Depreciation expense recorded for the period A 9. Merchandise inventory increased during the period D 10. Common stock is issued for cash at an amount above par value FA

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