problem 1 statement of cash flows 27 instructions selected changes in various accoun 4334925

 

PROBLEM 1—STATEMENT OF CASH FLOWS—27½%

 

INSTRUCTIONS: Selected changes in various accounts during a fiscal year are described below. By the use of X’s, indicate the section of the statement of cash flows (indirect or direct method) in which the change is reported. If the item described is not reported, so indicate.

 

Section of Statement of Cash Flows

Operating

ActivitiesInvesting

ActivitiesFinancing

ActivitiesNot

ReportedFor

Scoring

CHANGES IN ACCOUNTS

0.              Buildings—debit for acquisition for cash X0. ____

1.              Common Stock—credit for stock dividend issued 1. ____

2.              Accounts Receivable—net increase 2. ____

3.              Investments—credit for sale at book value 3. ____

4.              Merchandise Inventory—net decrease 4. ____

5.              Treasury Stock—debit for stock purchased 5. ____

6.              Retained Earnings—debit for net loss 6. ____

7.              Equipment—debit for purchase for cash 7. ____

8.              Retained Earnings—debit for cash dividends paid 8. ____

9.              Income Tax Payable—net decrease 9. ____

10.              Bonds Payable—credit for bonds issued for cash 10. ____

11.              Paid-in Capital in Excess of Par—Preferred Stock—credit for sale of preferred stock for cash               11. ____