Question

An analysis of comparative balance sheets, the current year’s income statement, and the general ledger accounts...

An analysis of comparative balance sheets, the current year’s income statement, and the general ledger accounts of Hailey Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary.

Indicate where each item should be presented in the statement of cash flows (indirect method) using these four major classifications: operating activity (that is, the item would be listed among the adjustments to net income to determine net cash provided by operating activities under the indirect method), investing activity, financing activity, or significant noncash investing and financing activity.

(a)

Exchange of land for patent.

 select an option                                                          Operating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity
(b)

Sale of building at book value.

 select an option                                                          Investing ActivityFinancing ActivityNoncash Investing and Financing ActivityOperating Activity
(c)

Payment of dividends.

 select an option                                                          Noncash Investing and Financing ActivityOperating ActivityInvesting ActivityFinancing Activity
(d)

Depreciation.

 select an option                                                          Financing ActivityOperating ActivityInvesting ActivityNoncash Investing and Financing Activity
(e)

Conversion of bonds into common stock.

 select an option                                                          Noncash Investing and Financing ActivityOperating ActivityFinancing ActivityInvesting Activity
(f)

Issuance of capital stock.

 select an option                                                          Operating ActivityFinancing ActivityNoncash Investing and Financing ActivityInvesting Activity
(g)

Amortization of patent.

 select an option                                                          Operating ActivityFinancing ActivityInvesting ActivityNoncash Investing and Financing Activity
(h)

Issuance of bonds for land.

 select an option                                                          Operating ActivityFinancing ActivityInvesting ActivityNoncash Investing and Financing Activity
(i)

Purchase of land.

 select an option                                                          Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(j)

Loss on disposal of plant assets.

 select an option                                                          Operating ActivityInvesting ActivityFinancing ActivityNoncash Investing and Financing Activity
(k)

Retirement of bonds.

 select an option                                                          Investing ActivityFinancing ActivityNoncash Investing and Financing ActivityOperating Activity
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Answer #1

Answer-

a Exchange of land for patent. Significant noncash investing and financing activity
b Sale of building at book value. Investing Activity
c Payment of dividends. Financing Activity
d Depreciation Operating Activity
e Conversion of bonds into common stock Significant noncash investing and financing activity
f Issuance of capital stock Financing Activity
g Amortization of patent Operating Activity
h Issuance of bonds for land. Significant noncash investing and financing activity
i Purchase of land. Investing Activity
j Loss on disposal of plant assets Operating Activity
k Retirement of bonds Financing Activity
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