QQuestionAnatomy and Physiology
QuestionAnatomy and Physiology
Indicate where each item would appear on a statement of cash flows using the *indirect method* by placing an X in the appropriate column(s). (More than one column may be used.)
| | Statement of Cash Flows | | | | Noncash
Investing & Financing
Activities | Not Reported
on Statement
or in Notes |
| --- | --- | --- | --- | --- | --- | --- |
| | | Operating
Activities | Investing
Activities | Financing
Activities | | |
| a. | Purchased treasury stock with cash | | | | | |
| b. | Inventory increased in the year | | | | | |
| c. | Issued bonds in return for cash | | | | | |
| d. | Accounts payable decreased in the year | | | | | |
| e. | Income taxes payable increased in the year | | | | | |
| f. | Purchased land by issuing common stock | | | | | |
| g. | Sold merchandise to customer for cash | | | | | |
| h. | Purchased a building with cash | | | | | |
| i. | Received a cash dividend from investment | | | | | |
| j. | Recorded depreciation expense | | | | | |
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Answer
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Step 1: Identify items that would appear under Operating Activities.
Operating Activities include items that affect cash flow as a result of the company's core business operations. These activities usually involve transactions that do not involve investing or financing. a. Not Reported on Statement or in Notes - No cash involved in purchasing treasury stock. X | Operating Activities | | | | | | | --- | --- | --- | --- | --- | --- | --- | | b. | Inventory increased in the year | | | | X | | | c. | Issued bonds in return for cash | | | X | | | | d. | Accounts payable decreased in the year | | X | | | | | e. | Income taxes payable increased in the year | X | | | | | | f. | Purchased land by issuing common stock | | | | X | | | g. | Sold merchandise to customer for cash | X | | | | | | h. | Purchased a building with cash | | | X | | | | i. | Received a cash dividend from investment | X | | | | | | j. | Recorded depreciation expense | X | | | | |
Step 2: Identify items that would appear under Investing Activities.
Investing Activities include the purchase, sale, or exchange of long-term assets such as property, plant, equipment, and investments in other companies. X | Operating Activities | Investing Activities | | | | | | --- | --- | --- | --- | --- | --- | --- | | b. | Inventory increased in the year | | | | X | | | c. | Issued bonds in return for cash | | | X | | | | d. | Accounts payable decreased in the year | | X | | | | | e. | Income taxes payable increased in the year | X | | | | | | f. | Purchased land by issuing common stock | | | X | | | | g. | Sold merchandise to customer for cash | X | | | | | | h. | Purchased a building with cash | | X | | | | | i. | Received a cash dividend from investment | X | | | | | | j. | Recorded depreciation expense | | | | X | |
Final Answer
The table below shows the correct placement of each item on a statement of cash flows using the indirect method: X | Operating Activities | Investing Activities | Financing Activities | Noncash Investing & Financing Activities | Not Reported on Statement or in Notes | | --- | --- | --- | --- | --- | --- | | a. | | | | X | | | b. | X | | | X | | | c. | | | X | | | | d. | X | | | | | | e. | X | | | | | | f. | | X | X | X | | | g. | X | | | | | | h. | | X | X | | | | i. | X | | | | | | j. | X | | | X | |
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