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​Carter-Pierce Investments specializes in​ low-risk government bonds.
Required
Identify each of​ Carter-Pierce's transactions as operating​ (O), investing​ (I), financing​ (F), non-cash investing and financing​ (NIF), or a transaction that is not reported on the statement of cash flows​ (N). Indicate whether each item increases​ (+) or decreases ​(​) cash. The indirect method is used for operating activities.
NIF
a.
Acquisition of building by cash payment


b.
Decrease in merchandise inventory


c.
Depreciation of equipment


d.
Decrease in accrued liabilities


e.
Payment of cash dividend


f.
Purchase of long-term investment


g.
Issuance of long-term note payable to borrow cash


h.
Increase in prepaid expenses


i.
Accrual of salary expense


j.
Acquisition of equipment by issuance of note payable


k.
Sale of long-term investment


l.
Issuance of common shares for cash


m.
Increase in accounts payable


n.
Amortization of intangible assets


o.
Loss on sale of equipment


p.
Payment of long-term debt


q.
Cash sale of land


r.
Repurchase of common shares


s.
Net income

Sagot :

Parrain

Answer:

Operating cash Activities relate to transactions that have to do with the daily operations of the business such as accounts receivables, payables and stock.

Investing cash activities relate to transactions that have to do with the capital expenditure of the company such as fixed assets and securities in other companies.

Financing relates to those transactions relating to how the business finances its operations which includes equity and capital.

Anything that would require cash to be spent is reducing the balance and anytime cash comes in, the balance is increased.

Decrease in current asset is an increase because it means less cash was spent to acquire the asset.

Decrease in current liability is a decrease because it means that the company paid cash to reduce the liability.

Amortization and Depreciation add to the Operating balance because they are none cash items that were removed from Net income.

a. Acquisition of building by cash payment ⇒ INVESTING (+).

 

b.  Decrease in merchandise inventory ⇒ OPERATING (+).

 

c.  Depreciation of equipment ⇒ OPERATING (+).

d.  Decrease in accrued liabilities ⇒ OPERATING (-)

e.  Payment of cash dividend ⇒ FINANCING (-).

f.  Purchase of long-term investment ⇒ INVESTING (-).

g.  Issuance of long-term note payable to borrow cash ⇒ FINANCING (+).

h.  Increase in prepaid expenses ⇒ OPERATING (-).

i.  Accrual of salary expense ⇒ OPERATING (+).  

j.  Acquisition of equipment by issuance of note payable. NIF

k.  Sale of long-term investment. ⇒ INVESTING (+).

 

l.  Issuance of common shares for cash. ⇒ FINANCING (+).

m.  Increase in accounts payable. ⇒ OPERATING (+).

n.  Amortization of intangible assets ⇒ OPERATING (+).

o.  Loss on sale of equipment ⇒ OPERATING (-).

p.  Payment of long-term debt. ⇒  FINANCING (-)

q.  Cash sale of land. ⇒ INVESTING (+)

r.  Repurchase of common shares. FINANCING (-).

s.  Net income. ⇒ OPERATING(+).

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