14-11 Would a sale of equipment for cash be considered a financing activity or an investing activity? Why?
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For each transaction listed below, indicate where it would bepresented on the statement of cash flows. Enter the number thatcorresponds to your answer in the box provided. Answer choices maybe used once, more than once, or not at all.
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1. Fill in the table by indicating if it is an increasing (+) or decreasing (-) transaction. Also indicate if it is an operating (O), investing (I), or financing (F), activity. + or - O, I, or F
Cash payment of dividends | 2,000 | ||
Cash payment for inventory | 120,650 | ||
Cash payment for expenses | 61,000 | ||
Cash payment for wages | 45,250 | ||
Cash payment for interest expense | 925 | ||
Cash payment for purchase of equipment | 25,350 | ||
Cash payment for repayment of debt | 14,000 | ||
Cash collection of accounts receivable | 340,500 | ||
Cash collection of interest revenue | 12,500 | ||
Cash collection of dividend revenue | 10,500 | ||
Cash proceeds from sale of equipment | 12,000 | ||
Cash proceeds from sale of common stock | 55,000 |
2. Using the information in the table from question 1, complete the following statement of cash flows using the direct method. List each transaction and amount under the appropriate section. Be sure to indicate if it is increasing or decreasing (+ or -). You may not need to use all of the lines.
Cash from Operating Activity | Amount |
Net cash __ (provided or used) by operating activity | |
Cash from Investing activity | Amount |
Net cash _____ (provided or used) by investing activity | |
Cash from Financing Activity | Amount |
Net cash __ (provided or used) by financing activity |
Net change in cash during period
Cash at beginning of period 27,000
Cash at end of period