Question

Classifying Cash Flows Identify the type of cash flow activity for each of the following events (operating, investing, or financing): a. Redeemed bonds b. Issued preferred stock c. Paid cash dividends d. Net income e. Sold equipment f. Purchased treasury stock g. Purchased patents h. Purchased buildings i. Sold long-term investments j. Issued bonds k. Issued common stock

Answer 1

Cash Flow activities for each event are:

a. Redeemed bonds (Financing activity)

b. Issued preferred stock (Financing activity)

c. Paid cash dividends (Financing activity)

d. Net income (Operating activity)

e. Sold equipment (Investing activity)

f. Purchased treasury stock (Financing activity)

g. Purchased patents (Investing activity)

h. Purchased buildings (Investing activity)

i. Sold long-term investments (Investing activity)

j. Issued bonds (Financing activity)

k. Issued common stock (Financing activity)

NOTE

-Operating activities entails cash activities related to net income.

-Investing activities encompasses cash activities related to non-current assets.

-Financing activities include cash activities related to owners' equity and non-current liabilities