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Identifying activities for the statement of cash flow

Tyler-Bolton Investments specializes in low-risk government bonds.

Identify each of the transactions as:
(O) operating
(I) investing
(F) financing
(N IF) non cash investing and financing
(N) not reported on the statement of cash flows

Indicate whether each item is an:
(+) increase
(-) decrease

a. Net income
b. Payment of cash dividend
c. Sale of long term investment
d. Loss on sale of equipment
e. Amortization of intangible assets
f. Issuance of long term note payable to borrow cash
g.Depreciation of equipment
h. Purchase of treasury stock
i. Issuance of common stock for cash
j. Increase in accounts payable
k. Acquisition of equipment by issuance of note payable
l. Payment of long term debt
m. Acquisition of building by cash payment
n. Accrual of salary expense
o. Purchase of long term investment
p. Decrease in merchandise inventory
q. Increase in prepaid expenses
r. Cash sale of land
s. Decrease in accrued liabilities

Solution Preview

Cash from operating activities
Cash from Operating activities converts the items reported on the income statement from the accrual basis of accounting to cash ( Accountingcoach, 2009)

As per mysmp, "The operating activities is the most critical component of the cash flow statement, because it shows if a company is able to turn a profit based on its current business model at this exact moment in time. "
Hence it is important to ...

Solution Summary

Response helps in identifying activities for the statement of cash flow