ABC company had the following transactions during the month of April 2020. They would like you, their accountant, to prepare a cash flow statement. Before preparing the statement, you first need to determine whether the items below results in a cash inflow or outflow in the statement of cash flows. Second, you are required to determine whether the transaction is an operating, investing, or financing activity by placing an √ in the appropriate columns.
ABC company had the following transactions during the month of April 2020. They would like you, their accountant, to prepare a cash flow statement. Before preparing the statement, you first need to determine whether the items below results in a cash inflow or outflow in the statement of cash flows. Second, you are required to determine whether the transaction is an operating, investing, or financing activity by placing an √ in the appropriate columns.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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. ABC company had the following transactions during the month of April 2020. They would like you,
their accountant, to prepare a cash flow statement. Before preparing the statement, you first need to
determine whether the items below results in a cash inflow or outflow in the statement of cash flows .
Second, you are required to determine whether the transaction is an operating, investing, or financing
activity by placing an √ in the appropriate columns.
Transcribed Image Text:Transaction
Example Receipt of interest
Inflow
Outflow Operating Investing Financing
-
Payment of dividends
Purchase of building for cash
A.
C.
Receipt from a credit customer
D.
Loan repayment to bank
E.
Payment of taxes
F.
Cash received from sale of land
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