For each of the following items, indicate by using theappropriate code letter, how the item should be reported in thestatement of cash flows, using the direct method.
(Points : 10)

Potential Matches:

1 : Declaration and payment of a cash dividend.

2 : Decrease in accounts receivable during a period.

3 : Conversion of bonds payable into common stock.

4 : Purchase of land for cash.

5 : Decrease in merchandise inventory during a period.

6 : Decrease in accounts payable during a period.

7 : Issuance of preferred stock for cash.

8 : Sale of equipment for cash at book value.

Answer

: Added in determining cash receiptsfrom customers

: Added in determining cash paymentsto suppliers

: Deducted in determining cashpayments to suppliers

: Cash outflowâinvesting activity

: Cash inflowâinvesting activity

: Cash outflowâfinancing activity

: Cash inflowâfinancing activity

: Significant noncash investing andfinancing activity

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28 Sep 2019

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Related questions

14. For each of the following items, indicatewith the letter X whether the transaction would appear in theoperating, investing, or financing activities section of thestatement of cash flows, or is not reported in any one of thesethree categories. Assume the indirect method is used for reporting.(6 pts)

Transaction		Activity
Transaction		Operating	Investing	Financing	None
1.	Revenue minus expenses from operations (i.e., net income)
2.	Collection of cash dividend.
3.	Payment of a cash dividend previously declared.
4.	Purchase of land in exchange for a long-term note payable.
5.	Issuance of common stock for cash.
6.	Cash settlement of a short-term note payable (principalonly).
7.	Sale of a productive asset for cash.
8.	Purchase of a patent.
9.	Sale of a short-term marketable security for cash.
10.	Increase in accounts receivable.
11.	Issuance of a stock dividend.

copperpig11

Exercise 12-7

Shown below are comparative balance sheets for IndigoCorporation.

Indigo Corporation Comparative Balance Sheets December 31
Assets	2017		2016
Cash	$ 141,984		$ 45,936
Accounts receivable	183,744		158,688
Inventory	348,696		394,632
Land	167,040		208,800
Equipment	542,880		417,600
Accumulated depreciationâequipment	(137,808	)	(66,816	)
Total	$1,246,536		$1,158,840
Liabilities and Stockholdersâ Equity
Accounts payable	$ 81,432		$ 89,784
Bonds payable	313,200		417,600
Common stock ($1 par)	451,008		363,312
Retained earnings	400,896		288,144
Total	$1,246,536		$1,158,840

Additional information:

1.		Net income for 2017 was $194,184.
2.		Depreciation expense was $70,992.
3.		Cash dividends of $81,432 were declared and paid.
4.		Bonds payable amounting to $104,400 were redeemed for cash$104,400.
5.		Common stock was issued for $87,696 cash.
6.		No equipment was sold during 2017.
7.		Land was sold for its book value.

Prepare a statement of cash flows for 2017 using the indirectmethod. (Show amounts that decrease cash flow witheither a - sign e.g. -45,000, or in parenthesis e.g.(45,000)).

Indigo Corporation Statement of Cash Flows December 31, 2017For the Year Ended December 31, 2017For theQuarter Ended December 31, 2017
Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land		$ 194184
Adjustments to reconcile net income to
Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	$ 70992
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	-8352
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	-25056
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	45936
		83520
Cash atBeginning of Period Cash at End ofPeriod Cash Flows from FinancingActivities Cash Flows from InvestingActivities Cash Flows from OperatingActivities Net Cash Provided by FinancingActivities Net Cash Provided by InvestingActivities Net Cash Provided by OperatingActivities Net Cash used by FinancingActivities Net Cash used by InvestingActivities Net Cash used by OperatingActivities Net Decrease inCash Net Increase in Cash		277704

Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	137808
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	125280
Cash atBeginning of Period Cash at End ofPeriod Cash Flows from FinancingActivities Cash Flows from InvestingActivities Cash Flows from OperatingActivities Net Cash Provided by FinancingActivities Net Cash Provided by InvestingActivities Net Cash Provided by OperatingActivities Net Cash used by FinancingActivities Net Cash used by InvestingActivities Net Cash used by OperatingActivities Net Decrease inCash Net Increase in Cash		263088

Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	-104400
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	87696
Decrease inAccounts Payable Decrease in AccountsReceivable Decrease inInventory DepreciationExpense Increase in AccountsPayable Increase in AccountsReceivable Increase inInventory Issuance of CommonStock NetIncome Payment of CashDividends Purchase ofEquipment Redemption ofBonds Sale of Land	81432
Cash atBeginning of Period Cash at End ofPeriod Cash Flows from FinancingActivities Cash Flows from InvestingActivities Cash Flows from OperatingActivities Net Cash Provided by FinancingActivities Net Cash Provided by InvestingActivities Net Cash Provided by OperatingActivities Net Cash used by FinancingActivities Net Cash used by InvestingActivities Net Cash used by OperatingActivities Net Decrease inCash Net Increase in Cash		64728

Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash		605520
Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash		45936
Cash at Beginning of PeriodCash at End of PeriodCash Flows fromFinancing ActivitiesCash Flows from Investing ActivitiesCash Flowsfrom Operating ActivitiesNet Cash Provided by FinancingActivitiesNet Cash Provided by Investing ActivitiesNet CashProvided by Operating ActivitiesNet Cash used by FinancingActivitiesNet Cash used by Investing ActivitiesNet Cash used byOperating ActivitiesNet Decrease in CashNet Increase in Cash		$ 651456

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lavenderplatypus935

Pizza Express Inc. began the 2016 accounting period with $7,500 cash, $5,500 of common stock, and $2,000 of retained earnings. Pizza Express was affected by the following accounting events during 2016: 1. Purchased $11,000 of supplies on account. 2. Earned and collected $28,000 of cash revenue. 3. Paid $9,500 cash on accounts payable. 4. Adjusted the records to reflect the use of supplies. A physical count indicated that $2,300 of supplies was still on hand on December 31, 2016. Required a. Show the effects of the events on the financial statements using a horizontal statements model given below. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. The beginning balances have been recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.)

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