E5-13B(Statement of Cash FlowsClassifications) The major classifications of activities rep
E5-13B(Statement of Cash Flows—Classifications) The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:
1. Operating activity—add to net income.
2. Operating activity—deduct from net income.
3. Investing activity.
4. Financing activity.
5. Not reported as a cash flow.
The transactions are as follows.
(a) Depreciation of machinery. (h) Sale of equipment.
(b) Payment of cash dividends. (i) Purchase of land and building.
(c) Purchase of treasury stock. (j) Amortization of patent.
(d) Decrease in accounts payable during the year. (k) Issuance of bonds for plant assets.
(e) Increase in accounts receivable during the year. (l) Redemption of bonds.
(f) Loss on sale of equipment. (m) Issuance of capital stock.
(g) Exchange of furniture for office equipment.