Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 21, Problem 21.1E
Classification of
• LO21–3 through LO21–6
Listed below are several transactions that typically produce either an increase or a decrease in cash. Indicate by letter whether the cash effect of each transaction is reported on a statement of cash flows as an operating (O), investing (I), or financing (F) activity. Transactions
___F_ 1. Sale of common stock
_____ 2. Sale of land
_____ 3. Purchase of
_____ 4. Merchandise sales
_____ 5. Issuance of a long-term note payable
_____ 6. Purchase of merchandise
_____ 7. Repayment of note payable
_____ 8. Employee salaries
_____ 9. Sale of equipment at a gain
_____ 10. Issuance of bonds
_____ 11. Acquisition of bonds of another corporation
_____ 12. Payment of semiannual interest on bonds payable
_____ 13. Payment of a cash dividend
_____ 14. Purchase of a building
_____ 15. Collection of nontrade note receivable (principal amount)
_____ 16. Loan to another firm
_____ 17. Retirement of common stock
_____ 18. Income taxes
_____ 19. Issuance of a short-term note payable
_____ 20. Sale of a copyright
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QUESTION 6
Which of the fotowing is considered a fnancing
activity when preparing the statement of cash flows?
A) cash payment for the purchase of equpment
BỊ cash payment for extonding credit to others
C) caah recelpt from the sale of common stock
D) payment of interest on a bond issue
Classifying Items in the Statement of Cash Flows
The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement.
(a)
(b)
1. Payments of short-term debt.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
2. Repurchases of common stock.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
3. Purchases of property and equipment.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
4. Sale of investments classified as long-term.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
5. Proceeds from the issuance of common stock.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
6. Increase in prepaid expenses and other current assets.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
7. Acquisition for cash of a competitor.…
Intermediate Accounting 105
What is the purpose of a statement of cash flows? How does it differ from a balance sheet and an income statement?
Please provide GAAP concept and own explanation / example.
Chapter 21 Solutions
Intermediate Accounting, 10 Ed
Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2QCh. 21 - Prob. 21.3QCh. 21 - Prob. 21.4QCh. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q
Ch. 21 - Perhaps the most noteworthy item reported on an...Ch. 21 - Prob. 21.12QCh. 21 - Given sales revenue of 200,000, how can it be...Ch. 21 - Prob. 21.14QCh. 21 - When determining the amount of cash paid for...Ch. 21 - Prob. 21.16QCh. 21 - When using the indirect method of determining net...Ch. 21 - Prob. 21.18QCh. 21 - Prob. 21.19QCh. 21 - Where can we find authoritative guidance for the...Ch. 21 - U.S. GAAP designates cash outflows for interest...Ch. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Investing activities LO215 Carter Containers sold...Ch. 21 - Financing activities LO216 Refer to the situation...Ch. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Classification of cash flows LO213 through LO216...Ch. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.29ECh. 21 - Prob. 21.30ECh. 21 - Prob. 21.31ECh. 21 - Prob. 21.32ECh. 21 - Prob. 21.1PCh. 21 - Research Case 219 FASB codification; locate and...Ch. 21 - IFRS Case 2110 Statement of cash flows...
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