Answer:
Selection of appropriate categories of the effects on a statement of cash flows:
1. Payment on long-term debt ____
c. Cash provided/used by financing activities.
2. Issuance of bonds at a premium ____
c. Cash provided/used by financing activities.
3. Collection of accounts receivable ____
a. Cash provided/used by operating activities.
4. Cash dividends declared ____
c. Cash provided/used by financing activities.
5. Issuance of stock to acquire land ____
c. Cash provided/used by financing activities.
b. Cash provided/used by investing activities.
6. Sale of available-for-sale securities (long-term) ____
b. Cash provided/used by investing activities.
7. Payment of employees' wages ____
a. Cash provided/used by operating activities.
8. Issuance of common stock for cash ____
c. Cash provided/used by financing activities.
9. Payment of income tax payable ____
a. Cash provided/used by operating activities.
10. Purchase of equipment ____
b. Cash provided/used by investing activities.
11. Purchase of treasury stock (common) ____
c. Cash provided/used by financing activities.
12. Sale of real estate held as a long-term investment ____
b. Cash provided/used by investing activities.
Explanation:
a) Categories:
a. Cash provided/used by operating activities = normal business activities
b. Cash provided/used by investing activities = investments in assets
c. Cash provided/used by financing activities = funding requirements
d. Not a cash flow.
