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1.                                                                      

                        Item                -                Type of Activity

   (a) Payment of interest on notes payable  - Operating

   (b) Exchange of land for a patent  - Non cash investing and Financing

   (c) Sale of the building at book value - Investing

   (d) Payment of dividends - Financing

   (e) Depreciation - Operating

   (f) Conversion of bonds into common stock - Operating

   (g) Receipt of interest on notes receivable - Operating

   (h) Issuance of capital stock - Financing

   (i) Amortization of patent - Operating

   (j) Issuance of bonds for land - Non-cash Investing and financing

   (k) Purchase of land - Investing

   (l) Receipt of dividends on investment in stock - Operating

   (m) Loss on disposal of plant assets - Operating

   (n) Retirement of bonds - Financing

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2. Please refer to Explanation

   Explanation:

   I shall list the section of the Cash Flow statement that the following should be apportioned to in bold after the statement.

   OPERATING ACTIVITY , INVESTING ACTIVITY, FINANCING ACTIVITY, or SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITY.

   (a) Exchange of land for patent. SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITY.

   (b) Sale of building at book value. INVESTING ACTIVITY

   (c) Payment of dividends. FINANCING ACTIVITY

   (d) Depreciation. OPERATING ACTIVITY

   (e) Conversion of bonds into common stock. SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITY.

   (f) Issuance of capital stock. FINANCING ACTIVITY

   (g) Amortization of patent. OPERATING ACTIVITY

   (h) Issuance of bonds for land. SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITY.

   (i) Purchase of land. INVESTING ACTIVITY.

   (j) Loss on disposal of plant assets. OPERATING ACTIVITY

   (k) Retirement of bonds. FINANCING ACTIVITY.

   If you need any more clarification do comment. Cheers.

   Reply

3. Indicate how each item should be classified in the statement of cash flows using these four major classifications

   Explanation:

   Cash flows from operating activities

   Profit before taxation

   Adjustments for:

   Depreciation

   Investment income

   Interest expense

   Profit / (Loss) on the sale of property, plant & equipment

   Working capital changes:

   (Increase) / Decrease in trade and other receivables

   (Increase) / (Decrease) in inventories

   Increase / (Decrease) in trade payables

   Cash generated from operations

   Interest paid

   Income taxes paid

   Dividends paid

   Net cash from operating activities

   Cash flows from investing activities

   Business acquisitions, net of cash acquired

   Purchase of property, plant and equipment

   Proceeds from sale of equipment

   Acquisition of portfolio investments

   Investment income

   Net cash used in investing activities

   Cash flows from financing activities

   Proceeds from issue of share capital

   Proceeds from long-term borrowings

   Payment of long-term borrowings

   Net cash used in financing activities

   Reply

4. Answer and Explanation:

   The classification are as follows

   (a) Payment of interest on notes payable = Operating activities as cash outflow

   (b) Exchange of land for patent = Non cash investing activity as it does not involve cash transactions

   (c) Sale of building at book value = Investing activities as cash inflow which is represented in a positive sign

   (d) Payment of dividends. = Financing activities as cash outflow which is represented in a negative sign

   (e) Depreciation = It is added to net income and shown in operating activities

   (f) Receipt of dividends on investment in stock = Operating activities as cash inflow

   (g) Receipt of interest on notes receivable =  Operating activities as cash inflow

   (h) Issuance of common stock = Financing activities as cash outflow

   (i) Amortization of patent = Operating activities as cash inflow and added to the net income

   (j) Issuance of bonds for land = Non cash investing activity as it does not involve cash transactions

   Reply

5. a.  Payment of interest on notes payable - Operating Activity

   b.  Exchange of land for patent- Non Cash investing activity

   c.  Sale of building at book value - Investing Activity

   d.  Payment of dividends - Financing Activity

   e.  Depreciation - Operating Activity

   f.   Receipt of interest on notes receivable - Operating Activity

   g.  Issuance of Capital Stock - Financing Activity

   h.  Amortization of patent - Operating Activity

   i.   Issuance of bonds for land - Non Cash investing activity

   j.   Purchase of land - Investing Activity

   Reply

6. Explanation:

   There are three types of activities in the cash flow statement which are described below:  

   1. Operating activities: It includes those transactions which affect the working capital after net income. The increase in current assets and a decrease in current liabilities would be deducted whereas the decrease in current assets and an increase in current liabilities would be added.  

   These changes in working capital would be adjusted. Moreover, the depreciation expense is added to the net income

   2. Investing activities: It records those activities which include purchase and sale of the long term assets. The purchase is an outflow of cash whereas sale is an inflow of cash

   3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption and dividend is an outflow of cash.

   So, the categorization is shown below:

   (a) Payment of interest on notes payable - Operating activity

   (b) Exchange of land for patent -  non- cash investing and financing activity

   (c) Sale of building at book value - Investing activity

   (d) Payment of dividends - Financing activity

   (e) Depreciation - Operating activity

   (f) Receipt of dividends on investment in stock - Operating activity

   (g) Receipt of interest on notes receivable - Operating activity

   (h) Issuance of capital stock - Financing activity

   (i) Amortization of patent - Operating activity

   (j) Issuance of bonds for land - Non-cash investing and financing activity

   (k) Purchase of land - Investing activity

   (l) Conversion of bonds into common stock - Non-cash investing and financing activity

   (m) Loss on sale of land - Operating activity

   (n) Retirement of bonds. - Financing activity

   Reply

7. Explanation:

   Basically there are three types of activities:

   1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.  It also includes depreciation expense, dividend received,interest payment and interest received on the note payable and the notes receivable, loss or gain on the disposal of the assets

   2. Investing activities: It records those activities which include purchase and sale of the long term assets

   3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.  

   So, the categorization is shown below:

   a) Payment of interest on notes payable - Operating activity

   b) Exchange of land for patent. - non-cash investing and financing activity as it does not involve any cash transactions

   c) Sale of building at book value - Investing activity

   d) Payment of dividends - financing activity

   e) Depreciation - Operating activity

   f) Receipt of dividends on investment in stock - Operating activity

   g) Receipt of interest on notes receivable - Operating activity

   h) Issuance of capital stock - Financing activity

   i) Amortization of patent  - Operating activity

   j) Issuance of bonds for land - non-cash investing and financing activity as it does not involve any cash transactions

   k) Purchase of land - Investing activity

   l) Conversion of bonds into common stock  - non-cash investing and financing activity as it does not involve any cash transaction

   m) Loss on sale of land  - Operating activity

   n) Retirement of bond - financing activity

   Reply

8. The classification are as follows

   (a) Payment of interest on notes payable = Operating activities as cash outflow

   (b) Exchange of land for patent = Non cash investing activity as it does not involve cash transactions

   (c) Sale of building at book value = Investing activities as cash inflow which is represented in a positive sign

   (d) Payment of dividends. = Financing activities as cash outflow which is represented in a negative sign

   (e) Depreciation = It is added to net income and shown in operating activities

   (f) Receipt of dividends on investment in stock = Operating activities as cash inflow

   (g) Receipt of interest on notes receivable =  Operating activities as cash inflow

   (h) Issuance of common stock = Financing activities as cash outflow

   (i) Amortization of patent = Operating activities as cash inflow and added to the net income

   (j) Issuance of bonds for land = Non cash investing activity as it does not involve cash transactions

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   Explanation:

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9. 1.Epithelium- lines and covers surfaces
   2. Connective tissue- protect, support, and bind together
   3. Muscular tissue- produces movement
   4. Nervous tissue- receive stimuli and conduct impulses
   Hope i helped u 🙂

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