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 how each item should be classified in the statement of cash flows 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, and significant noncash investing and financing activity.

(a)

Payment of interest on notes payable.

 select an optionselect an optionNoncash Investing and Financing ActivityInvesting ActivityFinancing ActivityOperating Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(b)

Exchange of land for patent.

 select an optionselect an optionNoncash Investing and Financing ActivityOperating ActivityInvesting ActivityFinancing Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(c)

Sale of building at book value.

 select an optionselect an optionFinancing ActivityOperating ActivityNoncash Investing and Financing ActivityInvesting Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(d)

Payment of dividends.

 select an optionselect an optionFinancing ActivityInvesting ActivityNoncash Investing and Financing ActivityOperating Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(e)

Depreciation.

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

Conversion of bonds into common stock.

 select an optionselect an optionOperating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(g)

Receipt of interest on notes receivable.

 select an optionselect an optionInvesting ActivityNoncash Investing and Financing ActivityOperating ActivityFinancing Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(h)

Issuance of capital stock.

 select an optionselect an optionNoncash Investing and Financing ActivityOperating ActivityInvesting ActivityFinancing Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(i)

Amortization of patent.

 select an optionselect an optionOperating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(j)

Issuance of bonds for land.

 select an optionselect an optionFinancing ActivityInvesting ActivityOperating ActivityNoncash Investing and Financing Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(k)

Purchase of land.

 select an optionselect an optionInvesting ActivityOperating ActivityNoncash Investing and Financing ActivityFinancing Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(l)

Receipt of dividends on investment in stock.

 select an optionselect an optionNoncash Investing and Financing ActivityOperating ActivityInvesting ActivityFinancing Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(m)

Loss on disposal of plant assets.

 select an optionselect an optionOperating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
(n)

Retirement of bonds.

 select an optionselect an optionOperating ActivityFinancing ActivityNoncash Investing and Financing ActivityInvesting Activity Noncash Investing and Financing ActivityFinancing ActivityInvesting ActivityOperating Activity
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