Question

Classify each transaction as either: operating activity (O), investing activity (I), financing activity (F), or noncash investing and financing activity (NC).Also, indicate whether the transaction generated a cash inflow, cash outflow, or no cash flow effect.Transaction Activity affected O, I, F, NC Cash inflow, outflow, or no cash flow effect1 Bonds payable are issued for cash at a discount. 2 Land is sold for cash at book value. 3 Bonds payable is converted into common stock. 4 Paid a cash dividend to preferred stockholders. 5 Land was acquired by issuing common stock. 6 Recorded sales on account. 7 Merchandise is sold to customers for cash. 8 Equipment is purchased by signing a 3-year, 10% note payable. 9 Sold buildings and equipment for cash. 10 Purchased inventory for cash. 11 Common stock is sold for cash above par value. 12 Cash proceeds from disposal of plant asset.

Answer 1

1a : F

1b: cash inflow

2a: O

2b: cash inflow

3a: F

3b: cash inflow

4a: F

4b: cash outflow

5a: I

5b:cash outflow

6a: NC

6b: no cashflow

7a: O

7b: cash inflow

8a:I

8b: no cashflow

9a: I

9b: cash inflow

10a: I

10b: cash outflow

11a: F

11b: cash outflow

12a: I

12b: cash inflow