Chapter 21, Problem 21.1E

Classification of cash flows

• LO21–3 through LO21–6

Listed below are several transactions that typically produce either an increase or a decrease in cash. Indicate by letter whether the cash effect of each transaction is reported on a statement of cash flows as an operating (O), investing (I), or financing (F) activity. Transactions

___F_ 1. Sale of common stock

_____ 2. Sale of land

_____ 3. Purchase of treasury stock

_____ 4. Merchandise sales

_____ 5. Issuance of a long-term note payable

_____ 6. Purchase of merchandise

_____ 7. Repayment of note payable

_____ 8. Employee salaries

_____ 9. Sale of equipment at a gain

_____ 10. Issuance of bonds

_____ 11. Acquisition of bonds of another corporation

_____ 12. Payment of semiannual interest on bonds payable

_____ 13. Payment of a cash dividend

_____ 14. Purchase of a building

_____ 15. Collection of nontrade note receivable (principal amount)

_____ 16. Loan to another firm

_____ 17. Retirement of common stock

_____ 18. Income taxes

_____ 19. Issuance of a short-term note payable

_____ 20. Sale of a copyright