Question

The following transactions were carried out by Crozier Manufacturing Limited. Required: Indicate into which category each transaction or adjustment is placed in the statement of cash flows: operating (O), financing (F), or investing (I) activities.

------------------A payment of $5,000 was made on a non‐current bank loan.                     

-----------------Depreciation expense for equipment was$1,000.

----------------$10,000 of common stock was issued for cash.

-----------------Cash dividends of $2,500 were declared and paid to stockholders.

A non‐current bank loan was assumed in exchange for equipment costing$7,000.

-----------------Land was purchased for $25,000cash.

-----------------$750 of accrued salaries was paid.

----------------A $5,000 operating loan was obtained. The loan is due on demand and is an integral part of the company’s cash management strategy.

--------------$10,000 of accounts receivable was collected.

-------------A building was purchased for $80,000: $30,000 was paid in cash and the rest was borrowed.

--------------Land was sold for $50,000cash.

--------------Equipment was sold for $6,000. The original cost was$10,000. The related accumulation   depreciation was $3,000.

--------------$1,200 cash was paid for a 12‐month insurance policy to take effect next year.

--------------A patent was amortized for $500.

--------------Stock was redeemed for $50,000 cash, the original purchase price.

Answer 1