Respuesta :
Answer:
a. Operating activities (indirect method)
1. Pays a $20,000 account payable
2. Collects a $15,000 account receivable
3. Pays $75,000 to suppliers for inventory.
b. Investing activities
Purchases equipment for $
Loans $50,000 to a customer, accepting a note receivable.
c. Financing activities
Issues $20 million in bonds
Declares and pays a cash dividend of $100,000
d. A separate noncash activities note
Exchanges land for a new patent. Both are valued at $300,000.
Explanation:
The categorisation and their effects are explained as follows:
a. Operating activities (indirect method)
1. Pays a $20,000 account payable: This a cash outflow and its effect is a reduction in cash flow from operating activities.
2. Collects a $15,000 account receivable: This a cash inflow and its effect is an increase cash flow from operating activities.
3. Pays $75,000 to suppliers for inventory: This a cash outflow and its effect is a reduction in cash flow from operating activities.
b. Investing activities
1. Purchases equipment for $: This a cash outflow and its effect is a reduction in cash flow from investing activities.
2. Loans $50,000 to a customer, accepting a note receivable: This a cash outflow and its effect is a reduction in cash flow from investing activities.
c. Financing activities
1. Issues $20 million in bonds: This a cash inflow and its effect is an increase in cash flow from financing activities.
2. Declares and pays a cash dividend of $100,000: This a cash outflow and its effect is a reduction in cash flow from financing activities.
d. A separate noncash activities note
1. Exchanges land for a new patent. Both are valued at $300,000: This is a noncash transaction that neitheir leads to the outlow nor inflow of cash.
Here, we are to classify the following information to operating activities, investing activities, financing activities, or separate noncash activities.
1. Issues $20 million in bonds will be classified as Financing activities.
2. Purchases equipment will be classified as will be classified as Investing activities.
3. Pays a $20,000 account payable will be classified as Operating activities.
4. Collects a $15,000 account receivable will be classified as Operating activities.
5. Exchanges land for a new patent will be classified as separate noncash activities.
6. Declares and pays a cash dividend of $100,000 will be classified as Financing activities.
7. Loans $50,000 to a customer accepting a note receivable will be classified as Investing activities.
8. Pays $75,000 to suppliers for inventory. $80,000 will be classified as Operating activities.
See similar classification here
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