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 December 28,made a large credit sale; terms,2/10,n/30.
____ (c)Received a dividend from an investment in IBM common stock.
____ (d)Paid a dividend to stockholders.
____ (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 plant assets 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 December 28,made a large credit sale; terms,2/10,n/30.
____ (c)Received a dividend from an investment in IBM common stock.
____ (d)Paid a dividend to stockholders.
____ (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 plant assets for cash.

Classification of Cash Flows