Question

Classify each of the following as an operating​ activity, an investing​ activity, or a financing activity. Also identify those items that are not reported on the statement of cash flows prepared by the direct method.

a. Net income
b. Payment of dividends
c. Borrowing
d. Payment of cash to suppliers
e. Making a loan
f. Receipt of cash dividends
g. Depreciation expense
h. Purchase of equipment

i. Issuance of shares
j. Purchase of another company
k. Payment of a note payable
l. Payment of income taxes
m. Collections from customers
n. Accrual of interest revenue
o. Expiration of prepaid expense

Answer 1

Answer :

Classification of  each of the following as an operating​ activity, an investing​ activity, or a financing activity on the statement of cash flows prepared by the direct method.

ITEMS	CLASSIFICATION
a. Net Income	Not Reported
b. Payment of dividends	Financing Activity
c. Borrowing	Financing Activity
d. Payment of cash to suppliers	Operating Activity
e. Making a loan	Financing Activity
f. Receipt of cash dividends	Operating Activity
g. Depreciation expense	Not Reported
h. Purchase of equipment	Investing Activity
i. Issuance of shares	Financing Activity
j. Purchase of another company	Investing Activity
k. Payment of a note payable	Not Reported
l. Payment of income taxes	Operating Activity
m. Collections from customers	Operating Activity
n. Accrual of interest revenue	Not Reported
o. Expiration of prepaid expense	Operating Activity