Question

Match all 6 transactions with the proper section of the Cashflow Statement and whether it is...

Match all 6 transactions with the proper section of the Cashflow Statement and whether it is a positive or negative amount. (Assume that Indirect Method was used to prepare Cashflow Statement.)

1

Proceeds from sale of investments in another company
2

Purchased new manufacturing equipment
   3  

Proceeds from acquiring a short term loan
     4   

Increase in inventory
     5   

Payment of a dividend on Common Stock
   6   

Decrease in Accounts Receivable
A.

Positive (Inflow) Financing Cashflow
B.

Negative (Outflow) Financing Cashflow
C.

Positive Adjustment to Operating Cashflow
D.

Negative Adjustment to Operating Cashflow
E.

Negative (Outflow) Investing Cashflow
F.

Positive (Inflow) Investing Cashflow
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Answer #1

SOLUTION

S.No. Particulars Answer
1 Proceeds from sale of investments in another company Positive (Inflow) Investing Cashflow
2 Purchased new manufacturing equipment Negative (Outflow) Investing Cashflow
3 Proceeds from acquiring a short term loan Positive (Inflow) Financing Cashflow
4 Increase in inventory Negative Adjustment to Operating Cashflow
5 Payment of a dividend on Common Stock Negative (Outflow) Financing Cashflow
6 Decrease in Accounts Receivable Positive Adjustment to Operating Cashflow
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