Classification of activities in cash flow statement Following are the four classifications of cash flows activities that are related to the cash flow statement: Operating Activities: In the operating activities section of the cash flow statement, cash inflows from the revenue of the business operations are reported, while cash outflows for the expenses for the business operations are reported. Investing activities: In the investing activities section of the cash flow statement, increase and decrease in the long-term assets representing outflow and inflow of cash on account of investing activities is reported. Financing activities: In the financing activities section of the cash flow, increase and decrease in the long-term liabilities and equities representing inflow and outflow of cash on account of financing activities are reported. Non-cash activities : The transactions where cash is not involved are treated as non-cash activities and are not reported in the statement of cash flow. To Identify: The given transactions in the form of journal entries as operating, investing, financing, or non-cash activities in the statement of cash flow.

Question

Want to see the full answer?

Answer 1

Question

Chapter 14, Problem 14.17E

To determine

Classification of activities in cash flow statement

Following are the four classifications of cash flows activities that are related to the cash flow statement:

Operating Activities: In the operating activities section of the cash flow statement, cash inflows from the revenue of the business operations are reported, while cash outflows for the expenses for the business operations are reported.

Investing activities: In the investing activities section of the cash flow statement, increase and decrease in the long-term assets representing outflow and inflow of cash on account of investing activities is reported.

Financing activities: In the financing activities section of the cash flow, increase and decrease in the long-term liabilities and equities representing inflow and outflow of cash on account of financing activities are reported.

Non-cash activities: The transactions where cash is not involved are treated as non-cash activities and are not reported in the statement of cash flow.

To Identify: The given transactions in the form of journal entries as operating, investing, financing, or non-cash activities in the statement of cash flow.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

PLEASE HELP!

Question 1. Pearl Leasing Company agrees to lease equipment to Martinez Corporation on January 1, 2025. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2 The cost of the machinery is $541,000, and the fair value of the asset on January 1, 2025, is $760,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $45,000, Martinez estimates that the expected residual value at the end of the lease term will be $45,000. Martinez amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2025. 5. The collectibility of the lease payments is probable. 6. Pearl desires a 10% rate of return on its investments. Martinez's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. Annual rental payment is…

PLEASEEEE HELP!