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MissTica
3 years ago
8

Determine proper classification (LO11-1) Analysis of an income statement, balance sheet, and additional information from the acc

ounting records of Gadgets, Inc., reveals the following items. Required: Select the section of the statement of cash flows in which each of these items would be reported: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.
1. Purchase of a patent.
2. Depreciation expense
3. Issuance of a note payable
4. Increase in inventory
Business
2 answers:
alexandr402 [8]3 years ago
7 0

Answer:

Patent-investing activity

depreciation expense-operating activity

issuance of note payable-financing activity

Increase in inventory-operating activity

Explanation:

The purchase of patent as intangible asset is reported as an investing activity item as an outflow of cash from the business.

Depreciation expense is meant to added to net income  in arriving at the net cash flows from operating activities

Issuance of a note payable is a financing item under the financing activities' segment of the cash flow as an inflow.

Increase in inventory is increase in net working capital which is deducted as an operating activity item .

mart [117]3 years ago
7 0

Answer:

1. Purchase of a patent - Investing activities

2. Depreciation expense - Operating activities

3. Issuance of a note payable - Financing activity

4. Increase in inventory - Operating activity

Explanation:

Operating activity of cash flows include cash inflows and cash outflows from day to day business activities. This includes cash flows use from ongoing business activities.

Investing activity of cash flows includes cash inflows and cash outflows from investments of the business. This includes purchase of assets, sale of assets, investment in securities.

Financing activity of cash flows include cash inflows and cash outflows to fund the company. The activities that are incurred to fiance the business are classified as financing activity.

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Answer:

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we can do this by using the present value of an annuity formula

the loan's interest rate is missing, so I looked for a similar question and found that it is 6%

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8 0
3 years ago
The primary objectives of control over inventory are
Morgarella [4.7K]

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4 0
3 years ago
Shareholders of mutual funds have all of the following rights EXCEPT: A) the right to vote on the selection of specific securiti
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5 0
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Answer:

See below

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Then, the difference will be;

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3 years ago
Liabilities are:___________ a) deferred credits that are recognized and measured in conformity with generally accepted accountin
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