Business, 16.04.2020 00:25 elijah207

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. (1) Received cash dividends from investments in trading securities. (2) Collected accounts receivable from customers. (3) Issued bonds payable for cash. (4) Paid wages to employees. (5) Issued stock for cash. (6) Sold equipment for cash. (7) Purchased land in exchange for a note payable. (8) Paid cash dividends. (9) Received interest from investments in trading securities. (10) Purchases of land for cash.

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Answer from: arizmendiivan713

The categorization is shown below:

Explanation:

The cash flow statement includes three types of activities which are listed below:

1. Operating activities: It involves those transactions that after net income affect the working capital. It will subtract the rise in current assets and a reduction in current liabilities, while adding the reduction in existing assets and a rise in current liabilities.

This will moderate the adjustments in working capital. In addition, the depreciation expenses are applied to the net profit and the loss on the selling of assets is added, while the gain on the sale of assets is excluded

2. Investing activities: it tracks operations that involve purchasing and selling long-term properties. Purchase is cash outflow while selling is cash inflow

3. Financing operations: it tracks transactions that have an impact on long-term debt and equity balance of shareholders. Share issue is a cash inflow while redemption and dividend are cash outflows.

Therefore, the categorization is shown below:

(1) Received cash dividends from investments in trading securities. = an (I) investing activity

(2) Collected accounts receivable from customers.= an (O) operating activity

(3) Issued bonds payable for cash.= a (F) financing activity

(4) Paid wages to employees. =an (O) operating activity

(5) Issued stock for cash. =a (F) financing activity

(6) Sold equipment for cash. = an (I) investing activity

(7) Purchased land in exchange for a note payable. =a significant (N) non-cash financing and investing activity

(8) Paid cash dividends. =a (F) financing activity

(9) Received interest from investments in trading securities. =an (I) investing activity

(10) Purchases of land for cash. = an (I) investing activity

Answer from: Quest

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Answer from: Quest

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