Question

Question 2

Classify each of the following as an operating, investing, or financing activity under ASPE:

Loaning money

Receipt of cash from issuance of bonds payable

Receiving cash from customers

Receiving interest revenue

Payments for inventory

Payments for interest

Receipt of cash from sale of equipment

Payments of acquisition of land

Receipt of cash from issuance of stock

Dividends paid to shareholders

Receipt of dividend income

Payment of salaries to employees

Payment of taxes

Answer 1

1 Loaning money - Financing activities

2 Receipt of cash from issuance of bonds payable - Financing activities

3 Receiving cash from customers - Operating activities

4 Receiving interest revenue - Investing activities

5 Payment for inventory - Operating activities

6 Payments for interest - Financing activities

7 Receipt of cash from sale of equipment - Investing activities

8 Payment of acquisition of land - Investing activities

9 Receipt of cash from issuance of stock - Financing activities

10 Dividends paid to shareholders - Financing activities

11 Receipt of dividend income - Investing activities

12 Payment of salaries to employees - Operating activities

13 Payment of taxes - Operating activities