Indicate How Each of the Following Events Should Be Classified

question 156

Essay

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 use of 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)Paid an account payable for inventory purchased in a prior accounting period.
________ (b)On December 28,made a large credit sale;terms,2/10,n/30.
________ (c)Received a dividend from an investment in IBM common stock.
________ (d)Paid a dividend to stockholders.
________ (e)Paid the interest on a note payable to First Bank.
________ (f)Paid the principal amount due on the note payable to First Bank.
________ (g)Transferred cash from a checking account into a money market fund.
________ (h)Made an adjusting entry to record accrued wages payable at the end of the period.
________ (i)Recorded depreciation expense for the current year.
________ (j)Purchased plant assets for cash.
Answer: O
(a)Paid an account payable for inventory purchased in a prior accounting period.
X (b)On December 28,made a large credit sale;terms,2/10,n/30.
O (c)Received a dividend from an investment in IBM common stock.
F (d)Paid a dividend to stockholders.
O (e)Paid the interest on a note payable to First Bank.
F (f)Paid the principal amount due on the note payable to First Bank.
X (g)Transferred cash from a checking account into a money market fund.
X (h)Made an adjusting entry to record accrued wages payable at the end of the period.
X (i)Recorded depreciation expense for the current year.
I (j)Purchased plant assets for cash.
Difficulty: 1 Easy
Topic: Classification of Cash Flows
Learning Objecti: 13-02 Describe how cash transactions are classified in a statement of cash flows.
Bloom's: Remember
AACSB: Analytical Thinking
-Format of a cash flows statement-direct method
Arrange the following information to complete the statement of cash flows for Jericho Corporation.Place parentheses around those dollar amounts representing cash outlays.

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Definitions:

Facilities

Physical buildings, spaces, or resources provided for a particular purpose, such as recreational, educational, or health services.

Programs

Programs refer to a set of planned activities designed to achieve specific outcomes, often used in contexts like education, social services, and software development.

Mentally Ill

Individuals experiencing disorders that affect mood, thinking, and behavior, often requiring medical or therapeutic intervention.

Conspicuous Waste

The act of deliberately wasting resources or money as a way to display one's wealth or status.