Ch 1 Critical Thinking Question 5:
Answer the following questions:
Why are noncash transactions, such as the exchange of common stock a building, included on a statement of cash flows? How are these noncash transactions disclosed?
Chapter 1 Exercise 1:
1. Classification of activities
Classify each of the following transactions as arising from an operating (O), investing (I), financing (F), or noncash investing/financing (N) activity.
________ Received $80,000 from the sale of land. ________ Received $3,200 from cash sales. ________ Paid a $5,000 dividend. ________ Purchased $8,800 of merchandise for cash. ________ Received $100,000 from the issuance of common stock. ________ Paid $1,200 of interest on a note payable. ________ Acquired a new laser printer by paying $650. ________ Acquired a $400,000 building by signing a $400,000 mortgage note.