Question

Each of these items must be considered in preparing a statement of cash flows for Irvin Co. for the year ended December 31, 2017. For each item, state how it should be shown in the statement of cash flows for 2017.


a. Issued bonds for $150,000 cash.

b. Purchased equipment for $200,000 cash.

c. Sold land costing $50,000 for $50,000 cash.

d. Declared and paid a $20,000 cash dividend.

Answer 1

Answer:

a. Issued bonds for $150,000 cash (cash outflow - Financing Activity)

b. Purchased equipment for $200,000 cash. (Cash outflow - Investing Activities)

c. Sold land costing $50,000 for $50,000 cash. (Cash inflow - investing Activities)

d. Declared and paid a $20,000 cash dividend. (Cash outflow - Finance Activities)

Answer 2

The classification is as follows:

a. When the bonds are issued for cash so the same is to be shown in the financial activity as the cash inflow.

b. When the equipment is purchased for cash so the same is to be shown in the investing activity as the cash outflow.

c. When the land is sold for cash so the same is to be shown in the investing activity as the cash inflow.

d. When the dividend is paid in cash so the same is to be shown in the financial activity as the cash outflow.

Learn more: brainly.com/question/17429689