Question

Stelling Corporation had the following transactions during 2020. Identify whether each transaction should be considered a cash flow from operating, investing, or financing activities, or whether the transaction is a significant non-cash activity.

1.

Issued $120,000 worth of preferred shares in exchange for land

2.

Exchanged a vehicle worth $30,000 for computer system worth $30,000

3.

Received a cash dividend of $40,000. - if ASPE Received a cash dividend of $40,000. - if IFRS

4.

Paid $12,000 due to suppliers for goods and services

5.

Purchased shares in another company as a long-term investment for $50,000 cash

6.

Paid $135,000 in salaries and wages

7.

Collected $30,000 from customers that had purchased on account

8.

Issued preferred shares for $75,000 cash

9.

Sold a long-term investment with a cost of $80,000 for $80,000 cash

10.

Collected $90,000 cash from customers for goods sold

Answer 1

1	Issued $120,000 worth of preferred shares in exchange for land	Non cash activity
2	Exchanged a vehicle worth $30,000 for computer system worth $30,000	Non cash activity
3	Received a cash dividend of $40,000. - if ASPE	Operating activity
	Received a cash dividend of $40,000. - if IFRS	Operating activity or Investing activity
4	Paid $12,000 due to suppliers for goods and services	Operating activity
5	Purchased shares in another company as a long-term investment for $50,000 cash	Investing activity
6	Paid $135,000 in salaries and wages	Operating activity
7	Collected $30,000 from customers that had purchased on account	Operating activity
8	Issued preferred shares for $75,000 cash	Financing Activity
9	Sold a long-term investment with a cost of $80,000 for $80,000 cash	Investing activity
10	Collected $90,000 cash from customers for goods sold	Operating activity

Kindly comment if you need further assistance.

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