Chapter 11, Problem 11.3E

Determine proper classification (LO11–1)

Analysis of an income statement, balance sheet, and additional information from the accounting records of Gadgets, Inc., reveals the following items.

1.    Purchase of a patent.

2.    Depreciation expense.

3.    Decrease in accounts receivable

4.    Issuance of a note payable.

5.    Increase in inventory.

6.    Collection of notes receivable.

7.    Purchase of equipment.

8.    Exchange of long-term assets.

10. Payment of dividends.

Required:

Indicate in which section of the statement of cash flows each of these items would be reported: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.