Identifying activity categories—direct method Consider the following transactions:
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a. Collection of accounts receivable. |
i. Purchase of treasury stock. |
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b. Issuance of note payable to borrow cash. |
j. Issuance of common stock for cash. |
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c. Depreciation. |
k. Payment of account payable. |
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d. Issuance of preferred stock for cash. |
l. Acquisition of building by |
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issuance of common stock. |
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e. Payment of cash dividend. |
m. Purchase of equipment. |
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f. Sale of land. |
n. Payment of wages to employees. |
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g. Acquisition of equipment |
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by issuance of note payable. |
o. Collection of cash interest. |
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h. Payment of note payable. |
p. Sale of building |
Requirement
1. Identify each of the transactions as a(n)
Operating activity (O)
Investing activity (I)
Financing activity (F)
Noncash investing and financing activity (NIF)
Transaction that is not reported on the statement of cash flows (N)
For each cash flow, indicate whether the item increases (+) or decreases (–) cash. The direct method is used for cash flows from operating activities.