Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver

تمرين 13

Classifying items on the indirect statement of cash flows
Destiny Corporation is preparing its statement of cash flows by the indirect method. Destiny has the following items for you to consider in preparing the statement:
______a. Increase in accounts payable
______b. Payment of dividends
______c. Decrease in accrued liabilities
______d. Issuance of common stock
_____e. Gain on sale of building
______f. Loss on sale of land
____g. Depreciation expense
______h. Increase in inventory
______i. Decrease in accounts receivable
______j. Purchase of equipment
Requirement
1. Identify each item as a(n)
• Operating activity-addition to net income (O+), or subtraction from net income (O-)
• Investing activity-addition to cash flow (I+), or subtraction from cash flow (I-)
• Financing activity-addition to cash flow (F+), or subtraction from cash flow (F-)
• Activity that is not used to prepare the indirect cash flow statement (N)