University:
Eastern Kentucky University
Course:
ACC 201 | Introduction to Financial Accounting
Academic year:

2021
Views:

233

Pages:

2
Author:

grosikesf4

Introduction to Financial Accounting Exercise Questions (Topic 8) 1) Selected transactions for Fine Communication Company are listed below: a) Cash sales of merchandise inventory inflow operating activity b) Cash payment of dividends outflow financing activity c) Sold buildings and equipment for cash inflow investing activity d) Collected accounts receivable inflow operating activity e) Depreciation expense non-cash item operating activity f) Cash receipts for interest income inflow investing activity g) Cash receipts from disposal of plant assets inflow investing activity h) Gain on sale of building non-cash item operating activity i) Cash payment of salaries outflow operating activity j) Repaid five year note payable outflow financing activity Classify each transaction as either an inflow or outflow; and indicate its activity as operating activity, an investing activity, a financing activity, or non-cash item. 2) Indicate whether each of the following items is either a cash inflow or outflow and in which section (operating, investing or financing) of the statement of cash flows it would be reported. Item Inflow or Section in the Outflow statement of Inflow cash flow Financing 1. The issuance of ordinary share 2. Loans made to another party Outflow Investing 3. Payments to the government for taxes Outflow Operating 4. Selling property, plant, and equipment Inflow Investing 5. Expenses paid in connection with shares issues Outflow Financing 6. Payment of an account payable Outflow Operating 7. Cash wages paid to employees Outflow Operating 8. Dividend received Inflow Investing 9. Purchase of equipment Outflow Investing 1 10. Redemption of loan notes 3) Outflow Financing There are three activities listed in the Statement of Cash Flows namely operating activities, investing activities and financing activities. a) b) c) d) e) f) g) h) i) j) Depreciation expense. Declaration and payment of dividends on company’s shares. Gain on the sale of motor vehicle formerly used in the business. The proceeds from the sale of the motor vehicle in item (c). An increase in the balance in accounts payable. The purchase of a new office building to be used in the business. A decrease in the inventory. An increase in notes payable (a non-current liability). A decrease in the balance of accounts receivable. Repurchase of ordinary shares (company’s own shares). For each of the above items, indicate which activity of the statement of cash flows will be affected. a) Depreciation expense. b) Declaration and payment of dividends on company’s shares. c) Gain on the sale of motor vehicle formerly used in the business. d) The proceeds from the sale of the motor vehicle in item (c). e) An increase in the balance in accounts payable. f) The purchase of a new office building to be used in the business g) A decrease in the inventory. h) An increase in notes payable (a non-current liability). i) A decrease in the balance of accounts receivable. j) Repurchase of ordinary shares (company’s own shares). Section in the statement of cash flow Non-cash flow operating activities Financial activities Non-cash flow operating activities Investing activities Operating activities Investing activities Operating activities Financial activities Operating activities Financial activities 2

Introduction to Financial Accounting Exercise Questions

Related Documents

Recommended Documents

Description

Related Documents

Want to Download This Document?

Free up your schedule!

Take 5 seconds to unlock