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slh6582
Jul 17, 2007, 10:05 AM
Classify the following cash flows as operating, investing, or financing activities:

1. Sold long-term investments for cash.
2. Received cash payments from customers.
3. Paid cash for wages and salaries.
4. Purchased inventories for cash. .
5. Paid cash dividends.
6. Issued common stock for cash.
7. Received cash interest on a note.
8. Paid cash interest on outstanding bonds.
9. Received cash from sale of land at a loss
10. Paid cash for property taxes on building.

I became a little confused with some of these so any help is much appreciated. Here is what I got so far. Let me know what numbers are wrong please.

1. Investing
2.. Operating
3. Operating
4. Operating
5. Financing
6. Financing
7. Investing
8. Operating
9. Investing
10. Operating

KongTheKonqueror
Jul 17, 2007, 09:35 PM
They all look good except for #7. It should be operating. The interest received would be operating income. It would only fall under investing when the note is is issued or when principle is paid.