Assignment correction -

Designate how each transaction would be reported on the statement of cash flows using OP for operating activities, IN for investing activities, FI for financing activities, I for an inflow of cash and O for an outflow of cash. If the transaction is included only in a supplemental schedule, denote this as SS.

Section Inflow or Outflow

1) Paid cash dividends ___FI_____ ____O____

2) Purchased 6 months of insurance in advance _____OP___ ___O_____

3) Sold inventory for cash ___OP_____ ___I_____

4) Purchased equipment signing a two-year note ____IN ____ ___O_____

5) Collected accounts receivable balance from a customer ____OP____ ____I____

6) Sold shares of another company's stock held for

speculative purposes ____IN____ ___I_____

7) Reclassified a note from long term to short term _____SS___ ________

8) Issued bonds at a premium ___FI_____ ____I___

9) Proceeds received from sell of marketable securities _____IN___ __I______

Fill in the appropriate blank figures in the income statement below.

Gross sales $7,500

Sales returns and allowances (A)

Less: Cash discounts on sales 250

(B) _______________________ $7,100

Cost of goods sold

Inventory, January 1, 2X10 200

Purchases (gross) $3,210

(C) _______________________ 275

Less: Cash discounts on purchases 280

Net Purchases (D)

Add: Freight In 50

Total cost of merchandise acquired 2,705

Cost of goods available for sale 2,905

Inventory, December 31, 2X10 280

Cost of goods sold (E)

Gross Profit $(F)

10) (A) $150(7,500-7,100-250= 150,00)

11) (B) Net Sales

12) (C) __Less: purchase returns and allowances

13) (D) $2,655 (3,210 - 275- 280 = 2,655)

14) (E) $2,625 (2,905- 280 = 2,625)

15) (F) 4,475 (7,100-2,625 = 4,475)