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    gotta be one's Avatar
    gotta be one Posts: 17, Reputation: 1
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    #1

    Sep 4, 2007, 09:47 PM
    How do these look
    For each of the following items, indicate whether it would be classified and reported under the operating activities (OA), investing activities (IA), or financing activities (FA) section of a statement of cash flows:
    1. Cash receipts from selling merchandise operating activities (OA)
    2. Cash payments for wages and salaries investing activities (IA)
    3. Cash proceeds from sale of stock financing activities (FA)
    4. Cash purchase of equipment investing activities (IA)
    5. Cash dividends paid financing activities (FA)
    6. Cash received from bank loan investing activities (IA),
    7. Cash payments for inventory operating activities (OA),
    8. Cash receipts from services rendered investing activities (IA)
    9. Cash payments for taxes financing activities (FA)
    10. Cash proceeds from sale of property no longer needed as expansion site financing activities (FA)
    kenzieb07's Avatar
    kenzieb07 Posts: 6, Reputation: 1
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    #2

    Sep 20, 2007, 10:32 AM
    Quote Originally Posted by gotta be one
    For each of the following items, indicate whether it would be classified and reported under the operating activities (OA), investing activities (IA), or financing activities (FA) section of a statement of cash flows:
    1. Cash receipts from selling merchandise operating activities (OA)
    2. Cash payments for wages and salaries investing activities (IA)
    3. Cash proceeds from sale of stock financing activities (FA)
    4. Cash purchase of equipment investing activities (IA)
    5. Cash dividends paid financing activities (FA)
    6. Cash received from bank loan investing activities (IA),
    7. Cash payments for inventory operating activities (OA),
    8. Cash receipts from services rendered investing activities (IA)
    9. Cash payments for taxes financing activities (FA)
    10. Cash proceeds from sale of property no longer needed as expansion site financing activities (FA)
    You must be a UOP student, as I have both the same problems you have posted as an assignment.
    I noticed two things that should be changed:
    Number 9 you say . Cash payments for taxes is a financing activity. It should actually be an operating activity. Chapter 2 of Albrecht (where these problems are) states that operating activities include taxes. Therefore, OA would be correct.
    Number 10 says 10. Cash proceeds from sale of property no longer needed as expansion site financing activities (FA)... however, as with all property issues, this is an investment activity. Review albrecht chapter 2, pages 44-45 for explanation. Hope this helps! :)

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