ACC 2020 - Identify the Statement of Cash Flow Section - Must show ALL work

Identify the Statement of Cash Flow Section

For each of the transactions below, determine whether it involves an operating activity, investing activity or financing activity. For each item, place an “X” in the appropriate column.

Transaction	Operating Activity	Investing Activity	Financing Activity
Office supplies were purchased for cash.
Dividends were declared and paid.
Bonds payable with a face value of $100,000 were sold for cash at 96.
A building was purchased and paid for.
Treasury stock was sold.
Accounts Payable were paid off.
Common stock of another firm was purchased for cash.
A machine with an original cost of $30,000 was sold for $7,000. Accumulated Depreciation to date was $23,000.
Short-term marketable securities (not cash equivalents) were sold.
Interest expense on the bonds above was paid in cash.
Land was purchased for cash.
Dividends were received on the common stock acquired above.

Use the following data for ABC Music Co. to prepare a statement of cash flows using the indirect method for the year ended June 30, 2016.

ABC Music Co.
Income Statement
For the Year Ended June 30, 2016

Net Sales		$350,000
Less Expenses
Cost of Goods Sold	$200,000
Depreciation Expense	20,000
Administrative Expenses	52,000
Selling Expenses	45,000
Loss on Sale of Investment	500
Total Expenses		317,500
Net Income		$ 32,500

ABC Music Co.
Comparative Balance Sheets
June 30 2016 and 2015
Assets	2016	2015
Cash	$ 4,500	$ 15,000
Accounts Receivable (net)	35,000	27,500
Inventory	40,000	50,000
Prepaid Expenses	3,000	2,500
Long Term Investments	20,000	25,000
Plant and Equipment	80,000	40,000
Accumulated Depreciation	(20,000)	(12,000)
Total Assets	$162,500	$148,000

Liabilities
Accounts Payable	$ 2,000	$ 6,000
Wages Payable	220	260
Taxes Payable	780	740
Notes Payable	20,000	12,000
Total Liabilities	$23,000	$ 19,000

Stockholders’ Equity
Common Stock	$ 65,000	$ 65,000
Retained Earnings	81,500	64,000
Total Paid in Capital and Retained Earnings	146,500	129,000
Less: Treasury Stock	( 7,000)	0
Total Stockholders’ Equity	$139,500	$129,000
Total Liabilities and Stockholders’ Equity	$162,500	$148,000