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Indirect Method for Each of the Following Items, Indicate by Using the Using

Question 168

Matching

Indirect Method
For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the cash flow statement, using the indirect method. The same letter may be used more than once.

Premises:

Responses:

Declaration and payment of a cash dividend

Cash outflow-investing activity

Purchase of a building for cash

Significant noncash investing and financing activity

Proceeds from sale of equipment at carrying amount

Added to profit

Loss on sale of land

Cash inflow-financing activity

Issue of common shares for cash

Cash inflow-investing activity

Decrease in accounts payable during a period

Cash outflow-financing activity

Retirement of bonds at maturity for cash

Deducted from profit

Decrease in accounts receivable during a period

Increase in merchandise inventory during a period

Acquisition of land in exchange for common shares

Premises:

Declaration and payment of a cash dividend

Purchase of a building for cash

Proceeds from sale of equipment at carrying amount

Loss on sale of land

Issue of common shares for cash

Decrease in accounts payable during a period

Retirement of bonds at maturity for cash

Decrease in accounts receivable during a period

Increase in merchandise inventory during a period

Acquisition of land in exchange for common shares

Responses:

Cash outflow-investing activity

Significant noncash investing and financing activity

Added to profit

Cash inflow-financing activity

Cash inflow-investing activity

Cash outflow-financing activity

Deducted from profit

Correct Answer:

Premises:

Responses:

Declaration and payment of a cash dividend

Purchase of a building for cash

Proceeds from sale of equipment at carrying amount

Loss on sale of land

Issue of common shares for cash

Decrease in accounts payable during a period

Retirement of bonds at maturity for cash

Decrease in accounts receivable during a period

Increase in merchandise inventory during a period

Acquisition of land in exchange for common shares

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Q169: Direct Method
For each of the following items,

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