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For each transaction listed below, indicate where it would be presented on the statement of cash...

For each transaction listed below, indicate where it would be presented on the statement of cash flows. Enter your answer by clicking in the drop-down box next to the transaction. Answer choices may be used once, more than once, or not at all. Be careful with matching questions because carmen randomizes the matches. Thus, if you print out the quiz to work on it and then enter your answers later in the week, it is very likely the order of the matches will be different. Therefore, exercise caution when entering your answers into carmen. Quiz scores will not be adjusted for errors in entering choices.

1. purchase of a patent for cash

      [ Choose ]            financing activity cash outflow            financing activity cash inflow            investing activity cash outflow            investing activity cash inflow            operating activity cash inflow            operating activity cash outflow      

2. cash received from a bank loan

      [ Choose ]            financing activity cash outflow            financing activity cash inflow            investing activity cash outflow            investing activity cash inflow            operating activity cash inflow            operating activity cash outflow      

3. cash received from customers who paid in advance for services to be performed later

      [ Choose ]            financing activity cash outflow            financing activity cash inflow            investing activity cash outflow            investing activity cash inflow            operating activity cash inflow            operating activity cash outflow      

4. cash received from the sale of a building

      [ Choose ]            financing activity cash outflow            financing activity cash inflow            investing activity cash outflow            investing activity cash inflow            operating activity cash inflow            operating activity cash outflow      

5. cash paid for rent on a warehouse

      [ Choose ]            financing activity cash outflow            financing activity cash inflow            investing activity cash outflow            investing activity cash inflow            operating activity cash inflow            operating activity cash outflow      

Solutions

Expert Solution

1.Purchase of patent for cash:

Answer: Purchase of patent is a long-term asset purchase. So, it is an Investing Activity cash outflow.

Patent is debited while Cash is credited.

2.Cash received from a bank loan

Answer: The cash received from a bank loan is a Financing activity cash inflow.

Cash is debited while Bank loan is Credited

3.Cash received from customer who paid in advance for service to be performed later

Answer: Since the cash is already received,so there is an inflow but the service is yet to be delivered,so there is a liability as well. This is an Operating Activity Cash inflow

Cash is debited while a cash advance liability account is credited

4.Cash received from sale of a building

Answer: Proceeds from sale of building is an Investing activity cash inflow

Cash is debited while sale of building is credited

5.Cash paid for rent on a warehouse

Answer: As the activity of rent paid is related to the business activity, this is an Operating Activity cash outflow.

Rent paid is debited while cash is credited

jeff jeffy answered 1 year ago
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