Neo Watch Company produces pocket watches and had the following transactions: 1. Retired long term bonds. 2. Sold a warehouse for $600,000. 3. Issued a long-term note payable for $350,000. 4. Purchased a new robotic system to automate manufacturing operations. 5. Purchased a 40 percent interest in Hazel Works, an electronics manufacturer. 6. Reported a loss on the sale of old equipment of $6,000. The equipment was sold for $3,000 in cash. 7. Obtained a long-term bank loan. 8. Paid cash dividends of $200,000. For purposes of the statement of cash flow, classify each of these transactions as an operating, investing, or financing activity. Additionally, indicate whether the activity is an inflow of cash or an outflow of cash.
Neo Watch Company produces pocket watches and had the following transactions: 1. Retired long term bonds. 2. Sold a warehouse for $600,000. 3. Issued a long-term note payable for $350,000. 4. Purchased a new robotic system to automate manufacturing operations. 5. Purchased a 40 percent interest in Hazel Works, an electronics manufacturer. 6. Reported a loss on the sale of old equipment of $6,000. The equipment was sold for $3,000 in cash. 7. Obtained a long-term bank loan. 8. Paid cash dividends of $200,000. For purposes of the statement of cash flow, classify each of these transactions as an operating, investing, or financing activity. Additionally, indicate whether the activity is an inflow of cash or an outflow of cash.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Neo Watch Company produces pocket watches and had the following transactions:
1. Retired long term bonds.
2. Sold a warehouse for $600,000.
3. Issued a long-term note payable for $350,000.
4. Purchased a new robotic system to automate manufacturing operations.
5. Purchased a 40 percent interest in Hazel Works, an electronics manufacturer.
6. Reported a loss on the sale of old equipment of $6,000. The equipment was sold for $3,000
in cash.
7. Obtained a long-term bank loan.
8. Paid cash dividends of $200,000.
For purposes of the statement of cash flow, classify each of these transactions as an operating,
investing, or financing activity.
Additionally, indicate whether the activity is an inflow of cash or an outflow of cash.
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