Question

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

1. Received cash from sale of equipment at a gain.
2. Received cash dividends from investments.
3. Cash paid to purchase investments in securities.
4. Issued preferred stock for cash.
5. Paid interest on the debt.
6. Paid accounts payable with cash.
7. Paid cash for rent.
8. Received cash from the sale of property at a loss.
9. Paid short-term debt with cash. 10. Paid long-term debt with cash.

Answer 1

Cash Flow Method

1. Received cash from sale of Investing activities

equipment at a gain -

2. Received cash dividends Operating activities

from investments.

3. Cash paid to purchase Investing activities

investments in securities.

4. Issued preferred stock for Financing activities

cash.

5. Paid interest on the debt. Operating activities

6. Paid accounts payable with Operating activities

cash.

7. Paid cash for rent. Operating activities

8. Received cash from the sale Investing activities

of property at a loss.

9. Paid short-term debt with cash. Operating activities

10. Paid long-term debt with cash. Financing activities