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The following transactions took place at Carrington Company Limited during the past year: Equipment to increase production capacity was purchased. Accounts payable to suppliers increased. Short-term investments were purchased. Old equipment was sold. • A cash dividend was declared and paid to shareholders. . Preferred shares were sold to investors to increase equity . Interest was paid on a bank loan. Accrued expenses payable increased Shares of another company were purchased • Several large invoices were received from customers decreasing accounts receivable • Marketing expenses increased . A 10-year bank loan was taken out. Question: For each of the above transactions, indicate whether it would be classified as an operating investing, or financing activity on the cash flow statement. You should only choose one category.per transaction Activity

The following transactions took place at Carrington Company Limited during the past year: Equipment to increase production capacity was purchased. Accounts payable to suppliers increased. Short-term investments were purchased. Old equipment was sold. • A cash dividend was declared and paid to shareholders. . Preferred shares were sold to investors to increase equity . Interest was paid on a bank loan. Accrued expenses payable increased Shares of another company were purchased • Several large invoices were received from customers decreasing accounts receivable • Marketing expenses increased . A 10-year bank loan was taken out. Question: For each of the above transactions, indicate whether it would be classified as an operating investing, or financing activity on the cash flow statement. You should only choose one category.per transaction Activity

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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01:14 The following transactions took place at Carrington Company Limited during the past year: Equipment to increase production capacity was purchased. • Accounts payable to suppliers increased. Short-term investments were purchased. • Old equipment was sold. . A cash dividend was declared and paid to shareholders, Preferred shares were sold to investors to increase equity. • Interest was paid on a bank loan. • Accrued expenses payable increased • Shares of another company were purchased. Several large invoices were received from customers decreasing accounts receivable • Marketing expenses increased. . A 10-year bank loan was taken out. Question: For each of the above transactions, indicate whether it would be classified as an operating investing, or financing activity on the cash flow statement. You should only choose one category.per transaction Activity Transaction Operating Investing Financing Equpment was purchased b Accounts payable mcreased Ic Short-term investments purchased d Old equipment sold e Cash dividend issued to shareholders Preferred shares were sold to investors a Interest was paid on tank an Accrued expenses payable increased
Transcribed Image Text:01:14 The following transactions took place at Carrington Company Limited during the past year: Equipment to increase production capacity was purchased. • Accounts payable to suppliers increased. Short-term investments were purchased. • Old equipment was sold. . A cash dividend was declared and paid to shareholders, Preferred shares were sold to investors to increase equity. • Interest was paid on a bank loan. • Accrued expenses payable increased • Shares of another company were purchased. Several large invoices were received from customers decreasing accounts receivable • Marketing expenses increased. . A 10-year bank loan was taken out. Question: For each of the above transactions, indicate whether it would be classified as an operating investing, or financing activity on the cash flow statement. You should only choose one category.per transaction Activity Transaction Operating Investing Financing Equpment was purchased b Accounts payable mcreased Ic Short-term investments purchased d Old equipment sold e Cash dividend issued to shareholders Preferred shares were sold to investors a Interest was paid on tank an Accrued expenses payable increased
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