ll euacciet n the preferred stock of another corporation n S

ll. euacciet n the preferred stock of another corporation. n. Sold for cash an investment in the preferred stock of another corporation. o. Received cash upon the maturity of an investment in cash equivalents. (lgnore interest.) Instructions Most of the preceding transactions should be included among the activities summarized in a state- ment of cash flows. For each transaction that should be included in this statement, indicate whether the transaction is classified as an operating activity, an investing activity, or a financing activity. If the transaction should not be included in the current year\'s statement of cash flows, briefly explain why not. (Assume that net cash flows from operating activities are determined by the direct method.) Among the transactions of Marvel Manufacturing were the following. 1. Made payments on accounts payable to office suppliers. 2. Paid the principal amount of a mortgage to Seventh Bank. 3. Paid interest charges relating to a mortgage to Seventh Bank. 4. Issued preferred stock for cash; management plans to use this cash in the near future to pur- chase another company 5. Paid salaries to employees in the finance department. robl from a customer

Solution

1. OPERATING ACTIVITY

2.FINANCING ACTIVITY

3.OPERATING ACTIVITY

4.FINANCING ACTIVITY

5.OPERATING ACTIVITY

6.OPERATING ACTIVITY

7.OPERATING ACTIVITY

8.OPERATING ACTIVITY

9.OPERATING ACTIVITY

10.INVESTING ACTIVITY

11.OPERATING ACTIVITY

12.OPERATING ACTIVITY

13.OPERATING ACTIVITY

14.INVESTING ACTIVITY

15.NOT INCLUDED,AS TRANSFERS BETWEEN CASH AND ITS EQUIVALENTS ARE NOT SEEN AS CASH RECEIPTS OR CASH PAYMENT.