Homework SourseIndicate if each transaction and event is 1 a source of cash
Indicate if each transaction and event is (1) a source of cash, (2) a use of cash, and/or (3) an adjustment leading to a source or use of cash (assume an indirect format). List also its placement in the statement of cash flows: operations (O), financing (F), investing (I), noncash significant (NCS), noncash nonsignificant (NCN), or no effect (NE).
Example:
a. Decrease in inventory.
b. Paid current portion of long-term debt.
c. Retire treasury stock.
d. Purchase marketable securities (noncurrent).
e. Issue bonds for property.
f. Declare stock dividend.
g. Sell equipment for cash.
h. Convert bonds to preferred stock.
i. Purchase inventory on credit.
j. Decrease in accounts payable from return of merchandise.
| Transaction or Event | Source | Use | Adjustment | Category in Stmt. of Cash Flows |
|---|---|---|---|---|
| Cash dividend received | X | O |
Solution
Impact of transaction :
| Transaction or event | Source | Use | Adjustment | Category in Stmt. of Cash Flows |
| a. Decrease in inventory | X | O | ||
| b. Paid current portion of long-term debt | X | F | ||
| c. Retire treasury stock. | X | F | ||
| d. Purchase marketable securities (noncurrent). | X | O | ||
| e. Issue bonds for property. | NE | |||
| f. Declare stock dividend. | NE | |||
| g. Sell equipment for cash. | X | I | ||
| h. Convert bonds to preferred stock. | NCS | |||
| i. Purchase inventory on credit. | NCN | |||
| j. Decrease in accounts payable from return of merchandise. | X | O | ||
