141 state whether each event below should be classified as an operating activity inv 4305885

141 state whether each event below should be classified as an operating activity inv 4305885

141) State whether each event below should be classified as an operating activity, investing activity, financing activity, shown in a separate schedule or note of noncash investing and financing activities, or not disclosed on the cash flow statement.

_______________  a) Paid for merchandise purchased on account

_______________   b) Received stock dividends

_______________   c) Received cash dividends

_______________   d) Paid interest on a short-term note payable

_______________   e) Retired bonds payable by issuing common shares

_______________   f) Issued common shares for cash

_______________   g) Issued preferred shares in exchange for land

_______________   h) Paid for a three-year insurance policy on property

_______________   i) Purchased equipment for cash

_______________   j) Purchased shares for cash to hold as a long-term investment

142) For each event below, determine if it should be classified as an operating activity, investing activity, or financing activity. Then determine the increase or decrease to the cash account.

Transaction

Type of Activity

Effect on Cash

1.

Sold 1,000 common shares for cash at $20 per share.

2.

Purchased equipment for $500,000 cash.

3.

Issued $2,000,000, 10-year, 10% bonds at 102.

4.

Sales on account for the current period amount to $160,000. The January 1 balance in accounts receivable was $95,000, the December 31 balance was 106,000.

5.

Interest income on the income statement for the current period is $20,500. Interest receivable on January 1 was $2,700, the December 31 balance was $2,250.

6.

Salary expense on the income statement for the current period is $150,900. Salary payable on January 1 was $20,300, the December 31 balance was $17,800.

7.

Declared cash dividends of $22,000 during the current period. Dividends payable on January 1 was $1,500, the December 31 balance was $2,300.

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