Classify each of the following transactions as an operating

Classify each of the following transactions as an operating, investing, or financing activity; or a noncash investing and financing activity.

6. Collection of sales revenue 7. Conversions of bonds payable to common stock 8. Loss on the sale of equipment 9. Purchase of another company\'s stock (to be held for more than one year) 10. Purchase of merchandise inventory

Solution

Collection of sales revenue Operating activity Conversions of bonds payable to common stock Noncash investing and financing activity Loss on the sale of equipment Noncash investing and financing activity Purchase of another company\'s stock Investing activity Purchase of merchandise inventory Operating activity Note:Loss on the sale of equipment under indirect method will be shown under operating activity