Question

MillerCoors Brewing Company is the world’s fifth largest brewer. In the United States, its tie to the magical appeal of the Rocky Mountains is one of its most powerful trademarks. Some of the items included in its recent annual consolidated statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or use (NA) if the item does not appear on the statement. (Note: This is the exact wording used on the actual statement.)

Answer 1

Answer:

1. Purchase of stock. FINANCING ACTIVITIES.

Financing activities relate to transactions that involve the capital of the company. They include long term debt and equity. In this case, the company is buying back its own shares so this falls under Financing activities as it has to do with the company's own capital.

2. Principal payment on long-term debt. FINANCING ACTIVITIES.

Principal repayment retires long term debt and as mentioned above, financing activities relate to activities that involve long term debt.

3. Proceeds from sale of properties. INVESTING ACTVITIES.

Properties are fixed assets and transactions involving these are considered investing activities so the proceeds from a sale of properties would rightfully be an investing activity.

4. Inventories (decrease). OPERATING ACTIVITIES.

Transactions that have to do with the day to day operations of the business fall under operating activities and this includes inventories decreasing.

5. Accounts payable (decrease). OPERATING ACTIVITIES.

Operations of the business includes accounts payables decreasing as well.

6. Depreciation and amortization. OPERATING ACTIVITIES.

Depreciation and amortization arise from using the fixed assets for day to day operations so this will fall under Operating activities.