Final answer:
In the statement of cash flows, the payment of salaries, receipt of cash from customers, and payment for the purchase of equipment are reported under various activities, while the purchase of supplies on account is not reported. The example of Singleton Bank's loan to Hank's Auto Supply illustrates assets on a bank's balance sheet and the workings of the fractional reserve banking system.
Step-by-step explanation:
The student's question pertains to whether certain transactions will be reported in the statement of cash flows. The transactions listed involve the payment of salaries, purchase of supplies on account, receipt of cash from customers for services performed in a previous month, and payment for the purchase of equipment. In the context of a statement of cash flows, the payment of salaries (transaction 1), receipt of cash from customers (transaction 4), and payment for the purchase of equipment (transaction 5) will be reported under operating, operating, and investing activities respectively. The purchase of supplies on account (transactions 2 and 3) does not involve immediate cash flow and, therefore, would not appear in the statement of cash flows.
The example regarding Singleton Bank highlights how loans, reserves, and deposits are recorded in a bank's balance sheet. Singleton Bank's loan to Hank's Auto Supply would appear as an asset on its balance sheet, while the deposit of the loan by Hank into First National would increase First National's reserves and deposits. The requirement for First National to hold 10% of the deposit as required reserves with the option to loan out the rest illustrates the fractional reserve banking system.