Question

Kiley Corporation had these transactions during 2022.

Analyze the transactions and indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity.
(a) Purchased a machine for $30,000, giving a long-term note in exchange.

select an option
Financing ActivitiesInvesting ActivitiesOperating ActivitiesNoncash Investing and Financing Activities

(b) Issued $50,000 par value common stock for cash.

select an option
Operating ActivitiesNoncash Investing and Financing ActivitiesFinancing ActivitiesInvesting Activities

(c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.

select an option
Investing ActivitiesOperating ActivitiesNoncash Investing and Financing ActivitiesFinancing Activities

(d) Declared and paid a cash dividend of $13,000.

select an option
Financing ActivitiesInvesting ActivitiesOperating ActivitiesNoncash Investing and Financing Activities

(e) Sold a long-term investment with a cost of $15,000 for $15,000 cash.

select an option
Financing ActivitiesInvesting ActivitiesOperating ActivitiesNoncash Investing and Financing Activities

(f) Collected $16,000 from sale of goods.

select an option
Operating ActivitiesNoncash Investing and Financing ActivitiesFinancing ActivitiesInvesting Activities

(g) Paid $18,000 to suppliers.

Answer 1

The transactions of Kiley Corporation for 2022 have been categorized into the appropriate sections of the cash flow statement, including noncash investing and financing activities, financing activities, investing activities, and operating activities, depending on the nature of each transaction.

Step-by-step explanation:

When analyzing the transactions for Kiley Corporation, each can be categorized within the cash flow statement sections of operating activities, investing activities, financing activities, or noncash investing and financing activities.

1. Purchased a machine for $30,000, giving a long-term note in exchange - Noncash Investing and Financing Activities.
2. Issued $50,000 par value common stock for cash - Financing Activities.
3. Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000 - Noncash Investing and Financing Activities.
4. Declared and paid a cash dividend of $13,000 - Financing Activities.
5. Sold a long-term investment with a cost of $15,000 for $15,000 cash - Investing Activities.
6. Collected $16,000 from the sale of goods - Operating Activities.
7. Paid $18,000 to suppliers - Operating Activities.

Firms make financial decisions involving current spending for future profits, raising capital through various means like early-stage investors, reinvesting profits, borrowing, and selling stock.