Use the following legends to indicate how each transaction would be reported on
ID: 2443870 • Letter: U
Question
Use the following legends to indicate how each transaction would be reported on the statement of cash flows. (Assume that the company uses the direct method in the Operating Activities Section.)IO= Inflow from operating activities
OO= Outflow from operating activities
II= Inflow from investing activities
OI= Outflow from investing activities
IF= Inflow from financing activities
OF= Outflow from financing activities
NR= Not reported in the body of the statement of cash flows but included in a supplemental schedule.
1.) ______ Collected $10,000 in cash from customers open accounts for the period.
2.) ______ Paid one of the company's inventory suppliers $500 in settlement of an open account.
3.) ______Purchased a new copier for $6,000; signed a 90 day note payable
4.) ______ Issued bonds at face value of $100,000
5.) ______ Made $23,200 in cash sales for the week
6.) ______ Purchased an empty lot adjacent to the factory for $50,000; the seller of the land agrees to accept a five-year promissory note as consideration
7.) ______ Renewed the property insurance policy for another 6 months; cash of $1,000 is paid for renewal.
8.) ______ Purchased a machine for $10,000
9.) ______ Paid cash dividends of $2,500
10.) ______ Reclassified as short-term a long-term note payable of $5,000 that is due within the next year
11.) ______ Purchased 500 shares of the company's own stock on the open market for $4,000.
12.) ______ Sold 500 shares of Nike stock for book value of $10,000 (they had been classified as long-term investments.)
Explanation / Answer
1. IO 2. OO 3. NR 4. IF 5. IO 6.NR 7. OO 8.OI 9.OF 10.NR 11.OF 12. II