Question

The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an x in the appropriate column.

Statement of Cash Flows
S.no.		Operating Activities	Investing Activities	Financing Activities	Noncash Investing and Financing Activities	Not Reported on Statement or in Notes
a	Declared and paid a cash dividend
b	Recorded depreciation expense
c	Paid cash to settle long-term note payable
d	Paid cash to settle long-term note payable
e	Accounts receivable decreased in the yea
f	Purchased land by issuing common stock
g	Inventory increased in the year
h	Sold equipment for cash, yielding a loss
i	Accounts payable decreased in the year
j	Income taxes payable increased in the year

Short answer

1. Financing activities
2. Operating activities
3. Financing activities
4. Operating activities
5. Operating activities
6. Noncash Investing and financing activities
7. Operating activities
8. Operating activities and Investing activities
9. Operating activities
10. Operating activities

Step-by-step solution

Meaning of Cash Flow from Operating Activities

Cash flow from operating activities includes activities directly related to the business's main operational activitieslike sales and purchase of goods and services.

Indicating each item.

Statement of Cash Flows
S.no.		Operating Activities	Investing Activities	Financing Activities	Noncash Investing and Financing Activities	Not Reported on Statement or in Notes	Explanation
a	Declared and paid a cash dividend			X			Dividend payments are usually seen as financing activities since they are made to the investors (shareholders) who effectively co-financed the business.
b	Recorded depreciation expense	X					Depreciation is an expense of operations. A method of accounting known as depreciation assigns the decline in value of fixed assets over time. Depreciation is an operating expense because these fixed assets are required for regular business activities.
c	Paid cash to settle long-term note payable			X			Once the organization gets the funds from the lender, the principal amount from a long-term loan, or note payable, often appears in the financing activities part of the cash flow statement.
d	Prepaid expenses increased in the year	X					Ordinarily, companies report their prepaid expense as follows under operating activities. The increment or diminish in prepayments covers prepaid expenses. This distinction comes from the equalizations recorded for the heading within the balance sheet.
e	Accounts receivable decreased in the year	X					Cash receipts from the sale of products and administrations, as well as receipts from the collection of accounts receivable, are two illustrations of cash inflows from operating operations.
f	Purchased land by issuing common stock				X		Purchased land by issuing common stock is a non-cash activity as it does not change the cash flow.
g	Inventory increased in the year	X					A rise in inventory reveals that a business has bought more products than it can sell. There was a further cash outflow since cash had to be used to purchase the extra inventory. A cash outflow adversely or negatively impacts the cash position of the business.
h	Sold equipment for cash, yielding a loss	X	X				There are two answers for item H since the loss will be added back to the net income under the operating activities, while the selling price will also be added to the investing activities.
i	Accounts payable decreased in the year	X					For the cash flow from operating operations to be accurate, a fall in accounts payable must be accompanied by a corresponding decrease in the cash balance.
j	Income taxes payable increased in the year	X					Some frequent operating actions are cash receipts from goods sold, employee paychecks, tax, and supplier payments.