Question

For the item below, determine whether the amount would be disclosed in the cash flow statement under: Operating (CFO), Investing (CFI), or Financing (CFF), as well as if would be a net increase (+) or decrease (-) in cash or cash equivalents:

A. Principal payments on long-term borrowings

B. Decrease in accounts receivable

C. Proceeds from long-term borrowings

D. Increase in deferred income tax net liability

E. Net earnings

F. Increase in prepaid expenses

G. Increase in merchandise inventories

H. Cash dividends paid

I. Proceeds from issuance of common stock

J. Increase in accrued salaries, wages, and related benefits

K. Payments for repurchase of common stock

L. Capital Expenditures

M. Increase in accounts payable

N. Depreciation and amortization expenses

Answer 1

A. Principal payments on long-term borrowings = Financing -

B. Decrease in accounts receivable = Operating +

C. Proceeds from long-term borrowings = Financing +

D. Increase in deferred income tax net liability = Operating +

E. Net earnings = Operating +

F. Increase in prepaid expenses = Operating -

G. Increase in merchandise inventories = Operating -

H. Cash dividends paid = Financing -

I. Proceeds from issuance of common stock = Financing +

J. Increase in accrued salaries, wages, and related benefits = Operating +

K. Payments for repurchase of common stock = Financing -

L. Capital Expenditures = Investing -

M. Increase in accounts payable = Operating +

N. Depreciation and amortization expenses = Operating +