Use the following codes to indicate how the cash flow effect, if any, of each tr

Question

Use the following codes to indicate how the cash flow effect, if any, of each transaction would he reported on a statement of cash flows if the operating activities section is prepared using the direct method. (Choices may be used more than once.) Inflow from operating activity Outflow from operating activity Inflow from investing activity Outflow from investing activity Inflow from financing activity Outflow from financing activity Noncash investing and financing activity Not reported on statement of cash flows Purchased truck for cash Issued common stock for cash Paid employee insurance expense Repaid long-term bonds payable Received payments from accounts receivable Signed a long-term mortgage to acquire land and a building Declared stock dividends Paid cash dividends Sold office building for cash Paid interest on a capital lease

Explanation / Answer

1. Purchased Truck for Cash - d.Outflow from Investing Activity

2. Issued Common Stock for Cash - e.Inflow from Financing Activity

3. Paid Employee Insurance Expense - b.Outflow from Operating Activity

4. Repaid Long term bonds Payable -f. Outflow from Financing Activity

5. Received Payment from Accounts Receivable -a.Inflow from Operating Activity

6. Signed a long term mortgage to acquire land and Building -g. Non Cash Investing and Financing Activity

7.Declared Stock Dividend -h.Not reported in statement of Cash Flow

8.Paid Cash Dividend - f.Outflow from Financing Activity

9.Sold office Buliding For cash -c.Inflow from Investing Activity

10. Paid Interest on a capital lease - f.Outflow from Financing Activity

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