Classification of Cash Flows

question 58

Essay

Classification of cash flows
Indicate how each of the following events should be classified in a statement of cash flows for the current calendar year.Use the following code: O = operating activities,I = investing activities,and F = financing activities
Assume this company uses the direct method.If the event does not involve a cash flow that should be included in the statement of cash flows,use an X.
____ (a)Declared a dividend to be paid early next year.
____ (b)Recorded depreciation expense for the current year.
____ (c)At year-end,paid rent in advance for the next six months.
____ (d)Issued capital stock for cash; management plans to use this cash to invest in marketable securities.
____ (e)Sold a parcel of unused land at a loss.
____ (f)Collected principal amount due on a note receivable.
____ (g)Used the cash received in d,above,to purchase marketable securities.
____ (h)Collected interest due on note receivable described in f,above.
____ (i)Made an adjusting entry to accrue interest payable at year-end.
____ (j)Collected account receivable from a customer who made a large credit purchase in a prior period.

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Definitions:

Insanity Plea

A legal defense used in court that claims the defendant was unable to understand the nature of their actions due to mental illness at the time of the crime.

Feigning Mental Illness

Pretending to have a psychiatric condition that one does not actually have, often for personal gain.

Violent Criminals

Individuals who commit crimes involving the use or threat of physical force or harm against others.

Not Guilty

A legal verdict stating that there is not enough evidence to prove beyond a reasonable doubt that someone committed the crime they were charged with.