Question

Classify the following cash flows as either operating, investing, or financing activities assume indirect method.

1. Received cash from short-term debt issuance.
2. Paid cash dividends.
3. Received cash payments from customers.
4. Purchased inventories with cash.
5. Paid cash interest on outstanding notes.
6. Received cash dividends from investments.
7. Paid accounts payable with cash.
8. Sold stock investments for cash.
9. Received cash from sale of equipment.
10. Received cash from long-term debt issuance.

Answer 1

Operating Activities

Received cash payments from customers.

Purchased inventories with cash.

Paid cash interest on outstanding notes.

Paid accounts payable with cash.

Investing Activities

Sold stock investments for cash.

Received cash from sale of equipment.

Received cash dividends from investments.

Financing Activities

Received cash from short-term debt issuance.

Paid cash dividends.

Received cash from long-term debt issuance.

Step-by-step explanation:

Operating Activities consist of trading activities of the business.

Investing Activities consists of acquisition and sale of investments

Financing Activities costs of sourcing and repayments of sources of finance