Homework SourseComplete each of the columns on the table below indicating i
Complete each of the columns on the table below, indicating in which section each item would be reported on the statement of cash flows (operating, investing, or financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For item that affect more than one section of the statement, indicate all affected. Assume the indirect method of reporting cash flows from operating activities.
The first item has been completed as an example.
Item
Statement Section
Amount to Report
+/– Effect on Cash
Depreciation of $15,000 for the period
Operating
$15,000
Increase
Issuance of common stock for
$35,000
Increase in accounts payable of
$7,000
Retirement of $100,000 bonds payable at 97
Purchase of long-term investments for
$94,500
Dividends declared and paid of $8,300
Increase in prepaid rent of $4,500
Decrease in Inventory of $5,300
Purchase of equipment for $17,600 cash
Sale of land originally costing
$134,000 for $130,000
Decrease in taxes payable of $2,100
]
Show all work
| Item | Statement Section | Amount to Report | +/– Effect on Cash |
| Depreciation of $15,000 for the period | Operating | $15,000 | Increase |
| Issuance of common stock for $35,000 | |||
| Increase in accounts payable of $7,000 | |||
| Retirement of $100,000 bonds payable at 97 | |||
| Purchase of long-term investments for $94,500 | |||
| Dividends declared and paid of $8,300 | |||
| Increase in prepaid rent of $4,500 | |||
| Decrease in Inventory of $5,300 | |||
| Purchase of equipment for $17,600 cash | |||
| Sale of land originally costing $134,000 for $130,000 | |||
| Decrease in taxes payable of $2,100 | ] |
Solution
Item
Statement Section
Amount to Report
+/– Effect on Cash
Depreciation of $15,000 for the period
Operating
$15,000
Increase
Issuance of common stock for
$35,000
Financing
$35,000
Increase
Increase in accounts payable of
$7,000
Operating
$7000
Increase
Retirement of $100,000 bonds payable at 97
Financing
97,000
Decrease
Purchase of long-term investments for
$94,500
Investing
94,500
Decrease
Dividends declared and paid of $8,300
Financing
8,300
Decrease
Increase in prepaid rent of $4,500
Operating
4,500
Decrease
Decrease in Inventory of $5,300
Operating
5,300
Increase
Purchase of equipment for $17,600 cash
Investing
17,600
Decrease
Sale of land originally costing
$134,000 for $130,000
Investing
130,000
Increase
Decrease in taxes payable of $2,100
Operating
2,100
Decrease
| Item | Statement Section | Amount to Report | +/– Effect on Cash |
| Depreciation of $15,000 for the period | Operating | $15,000 | Increase |
| Issuance of common stock for $35,000 | Financing | $35,000 | Increase |
| Increase in accounts payable of $7,000 | Operating | $7000 | Increase |
| Retirement of $100,000 bonds payable at 97 | Financing | 97,000 | Decrease |
| Purchase of long-term investments for $94,500 | Investing | 94,500 | Decrease |
| Dividends declared and paid of $8,300 | Financing | 8,300 | Decrease |
| Increase in prepaid rent of $4,500 | Operating | 4,500 | Decrease |
| Decrease in Inventory of $5,300 | Operating | 5,300 | Increase |
| Purchase of equipment for $17,600 cash | Investing | 17,600 | Decrease |
| Sale of land originally costing $134,000 for $130,000 | Investing | 130,000 | Increase |
| Decrease in taxes payable of $2,100 | Operating | 2,100 | Decrease |
