The following transactions and events occurred during the year. Assuming that th

Question

The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an X in the appropriate column. Statement of Cash flows Investing & on Statement Operating Investing Financing Financing Activities Activities Activities Activities es Activities or in Notes a. Declared and paid a cash dividend b. Recorded depreciation expense c. Paid cash to settle long-term note payable d. Prepaid expenses increased in the year e. Accounts receivable decreased in the year f. Purchased land by issuing common stock g. Inventory increased in the year h. Sold equipment for cash, yielding a loss i. Accounts payable decreased in the year j. Income taxes payable increased in the year

Explanation / Answer

Noncash

Investing & Financing Activities

Note : In point (h) , there involve two transaction ie (1) Sold equipment for cash which is an investing activity .

(2) yielding a loss on sale of equipment which is shown as a part of operating activities in cash flow statement (indirect method)

Satatement of Cash Flows Operating Activities Investing Activities Financing Activities

Noncash

Investing & Financing Activities

Not Reported in Statement or in Notes a Declared & paid a cash dividends X b Recorded depreciation expenses X c Paid cash to settle long term note payable X d Prepaid expenses increased in the year X e Accounts Receivable decreased in the year X f Purchase land by issuing common stock X g Inventory increased in the year X h Sold equipment for cash , yielding a loss [Note] X X i Acctounts payable decreased in the year X j Income taxes payable increased in the year X

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