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Q5 For each of the following transactions, indicate whether net cash flows from operating activities (O),...

Q5
For each of the following transactions, indicate whether net cash flows from operating activities (O), investing activities (I), or financing activities (F) are affected and whether the effect is an inflow (+) or outflow (-), or write NE if the transaction has no effect on cash. (Hint: determine the journal entry recorded for the transaction. The transaction affects net cash flows if, and only if, the cash account is affected.)
______1. Paid a building rent for the following period. ______2. Issued shares for cash.
______3. Made payments to suppliers.
______4. Purchased equipment by signing a five-year note. ______5. Declared and paid cash dividends to shareholders. ______6. Paid salaries and wages to employees
______7. Paid cash to purchase land for new building site ______8. Purchased inventory on account
______9. Collected cash from customers
______10. Sold equipment for cash

Solutions

Expert Solution

______1. Paid a building rent for the following period.

Net Cash flows from operating activities (O)

- outflow

______2. Issued shares for cash.

Net Cash flows from financing activities (F)

+ inflow

______3. Made payments to suppliers.

Net Cash flows from operating activities (O)

- outflow

______4. Purchased equipment by signing a five-year note.

NE

______5. Declared and paid cash dividends to shareholders.

Net Cash flows from financing activities (F)

- outflow

______6. Paid salaries and wages to employees

Net Cash flows from operating activities (O)

- outflow

______7. Paid cash to purchase land for new building site

Net Cash flows from investing activities (I)

- outflow

______8. Purchased inventory on account

NE

______9. Collected cash from customers

Net Cash flows from operating activities (O)

+ inflow

______10. Sold equipment for cash

Net Cash flows from investing activities (I)

+ inflow

ekkarill92 answered 1 year ago
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