Question

In: Accounting

Classify each of the following items as an (O) operating activity, (I) investing activity, or (F)...

Classify each of the following items as an (O) operating activity, (I) investing activity, or (F) financing activity

____Purchase of a building

____issuance of capital stock

____receipt of interest revenue

____cash receipts from customers

____paid cash dividend to stockholders

____ paid inventory suppliers

____ collection of long term note

____ issuance of a long-term note payable

____ paid interest expense

____ purchased the stock of another company

Solutions

Expert Solution

Investing activity_____Purchase of a building - Since it relates to acquisition of long term asset for the business.

Financing activity____issuance of capital stock - Since it arranges long term finance for the business.

Operating activity____receipt of interest revenue - Since it is a day to day business activity

Operating activity____cash receipts from customers - Since it is a day to day business activity

Financing activity____paid cash dividend to stockholders - Since it relates to long term source of finance

Operating activity____ paid inventory suppliers - Since it is a day to day business activity

Investing activity____ collection of long term note - Since it is an inflow from investment

Financing activity____ issuance of a long-term note payable - Since it arranges long term finance for the business.

Operating activity____ paid interest expense - Since it is a day to day business activity

Investing activity____ purchased the stock of another company - Since it an investment made outside the business.


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