Indicate how each item should be classified in the statement of cash flows using
ID: 2545347 • Letter: I
Question
Indicate how each item should be classified in the statement of cash flows using these four major classifications: operating activity (that is, the item would be listed among the adiustments to net income to determine net cash provided by operating activities under the indirect method), investing activity, financing activity, and significant noncash investing and financing activity a) Payment of interest on notes payable (b) Exchange of land for patent. c) Sale of building at book value. (d) Payment of dividends. (e) Depreciation. f) Conversion of bonds into common stack (o) Receipt of interest on notes receivable. h) Issuance of capital stock. Amortization of patent U) Issuance of bonids for land. ) Receipt of dividends on investment in stock m) Loss on disposal of plant assets. (n) Retirement of bonds.Explanation / Answer
Classification :
a) Payment on interest on notes payable Operating activity b Exchange of land with patent Non cash investing and financing activity c Sale of building at book value Investing activity d Payment of dividends Financing activity e Depreciation Operating activity f Conversion of bonds payable to Common stock Non cash investing and financing activity g Receipt of interest on notes receivable Operating activity h Issue of common stock Financing activity i Amortization of patent Operating activity j Issuance of bonds for land Non cash investing and financing activity k Purchase of land Investing activity l Receipt of dividend on investment in stock Investing activity m loss on disposal of plant assets Operating activity n Retirement of bonds Financing activity