Question

Kiley Corporation had these transactions during 2017 Analyze the transactions and indicate whether each transaction is an operating activity, investing acivity, financing activity, ar noncash investing and financing activity

(a) Purchased a machine for $30,000, giving a long term note in exchange
(b) Issued $50,00D par value common stock for cash. 38%
(c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.
(d) Declared and paid a cash dividend of $13,000.
e) Sold a long-term investment with a cost of $15,000 for $15,000 cash
(f) Collected $16,000 from sale of goads.
(g) Paid $18,00D to suppliars.

Answer 1

Operating Activities in a business's Cash-flow statement involve activities that have to do with the core business of firm which include the provision of its goods or service to the market. An example would be Revenue.

Investing Activities involve activities related to long term assets as well as securities related to other company's such as ownership of other company stocks and bonds.

Financing Activities refer to how the business raises cash to conduct its operations and this includes Equity transactions (including dividends) and Debt.

Non-cash investing and financing activity are Investing or Financing activities that are done by exchanging one for the other devoid of the use of cash.

A) Purchased a machine for $30,000, giving a long-term note in exchange. - Non-cash Investing and Financing activity

B) Issued $50,000 par value common stock for cash. - Financing Activities

C) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. - Non-cash Investing and Financing activity

D) Declared and paid a cash dividend of $13,000. - Financing Activities

E) Sold a long-term investment with a cost of $15,000 for $15,000 cash. - Investing Activities

F) Collected $16,000 from sale of goods. - Operating Activities

G) Paid $18,000 to suppliers. - Operating Activities