Classification of cash flows
Indicate how each of the following events should be classified in a statement of cash flows for the current calendar year. Use the following code: O = operating activities, I = investing activities, and F = financing activities.
Assume use of the direct method. If the event does not involve a cash flow that should be included in the statement of cash flows, use an X.
____ (a) Paid an account payable for inventory purchased in a prior accounting period.
____ (b) On 28 December made a large credit sale; terms, 2/10, n/30.
____ (c) Received a dividend from an investment in IBM ordinary shares.
____ (d) Paid a dividend to shareholders.
____ (e) Paid the interest on a note payable to First Bank.
____ (f) Paid the principal amount due on the note payable to First Bank.
____ (g) Transferred cash from a checking account into a money market fund.
____ (h) Made an adjusting entry to record accrued wages payable at the end of the period.
____ (i) Recorded depreciation expense for the current year.
____ (j) Purchased property, plant, and equipment for cash.

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The Answer of Classification of cash flows
Indicate how each of the following events should be classified in a statement of cash flows for the current calendar year. Use the following code: O = operating activities, I = investing activities, and F = financing activities.
Assume use of the direct method. If the event does not involve a cash flow that should be included in the statement of cash flows, use an X.
____ (a) Paid an account payable for inventory purchased in a prior accounting period.
____ (b) On 28 December made a large credit sale; terms, 2/10, n/30.
____ (c) Received a dividend from an investment in IBM ordinary shares.
____ (d) Paid a dividend to shareholders.
____ (e) Paid the interest on a note payable to First Bank.
____ (f) Paid the principal amount due on the note payable to First Bank.
____ (g) Transferred cash from a checking account into a money market fund.
____ (h) Made an adjusting entry to record accrued wages payable at the end of the period.
____ (i) Recorded depreciation expense for the current year.
____ (j) Purchased property, plant, and equipment for cash.

Classification of Cash Flows