Question

Classify the following cash flows as either operating, investing, or financing activities assume indirect method.

1. Received cash from sale of equipment at a gain.
2. Received cash dividends from investments.
3. Cash paid to purchase investments in securities.
4. Issued preferred stock for cash.
5. Paid interest on the debt.
6. Paid accounts payable with cash.
7. Paid cash for rent.
8. Received cash from the sale of property at a loss.
9. Paid short-term debt with cash. 10. Paid long-term debt with cash.

Answer 1

Answer:

           Cash Flow                                         Method

1. Received cash from sale of               Investing activities

  equipment at a gain -

2. Received cash dividends                  Operating activities

   from investments.

3. Cash paid to purchase                       Investing activities

   investments in securities.

4. Issued preferred stock for                 Financing activities

    cash.

5. Paid interest on the debt.                    Operating activities

6. Paid accounts payable with               Operating activities

   cash.

7. Paid cash for rent.                                 Operating activities

8. Received cash from the sale               Investing activities

   of property at a loss.

9. Paid short-term debt with cash.           Operating activities

10. Paid long-term debt with cash.           Financing activities