Question

Problem 12-1A You are provided with the following information regarding events that occurred at Moore Corporation during 2019 or changes in account balances as of December 31, 2019 Moore prepares its statement of cash flows using the indirect approach Complete the first column of the table, indicating whether each item affects the operating activities section that is, the item would be listed among the adtments to net income to determine net cash provided by operating activities under the Indirect approach), investing activities section, financing activities section, or is a noncash transaction reported in a separate schedule. For those items classified as operating activities, indicate whether the items is added or subtracted from net income to determine net cash provided by operating activities. For all others select not applicable Statement of Cash Flow Section Affected If Operating, is it added or subtracted from net income? (a) Depreciation expense was $80,000 (1) Interest Payable account increased $5,000 (C) Received $26,000 from sale of plant assets (d) Acquired and by issuing common stock to seller (1) Paid $17,000 cash dividend to preferred stockholders. 01) Paid $4,000 cash dividend to common stockholders

Answer 1

Ans:

	Particulars	(1) Statement of cash flow section Affected	If Operating is it added or subtracted from net income
a	Depreciation Expense was $80,000	Operating Activity	Added
b	Interest Payable account increase $5000	Operating Activity	Subtracted
c	Received $26,000 from sale of Plant assets	Investing Activity	Added
d	Acquired land by Issuing common Stock to seller	NA	NA
e	Paid $17000 cash dividend to preference shareholders	Financing Activity	Subtracted
f	Paid $4000 cash dividend to common Stockholders	Financing Activity	Subtracted
g	Accounts receivable account decreased $10,000	Operating Activity	Added
h	Inventory Increased $2000	Operating Activity	Subtracted
i	received $100,000 from Issuing Bonds payable	Financing Activity	Added
j	Acquired Equipment for $16000 cash	Investing Activity	Subtracted

Note:

D;

Acquired land by Issuing common Stock to seller does not involve any Cash outflow or Inflows so Cash flow Statement is not effected in any Manner

Answer 2

(a)Depreciation expense was $80,000.= operating activity/added

(b)Interest Payable account increased $5,000. = operating activity/added

(c)Received $26,000 from sale of plant assets. = ininvesting activity/NA

(d)Acquired land by issuing common stock to seller. = noncash transaction/NA (e)Paid $17,000 cash dividend to preferred stockholders. = financing activity/NA

(f)Paid $4,000 cash dividend to common stockholders.= financing/ NA

(g)Accounts Receivable account decreased $10,000. = operating/added

(h)Inventory increased $2,000. = operating/subtracted

(i)Received $100,000 from issuing bonds payable. = financing/NA

(j)Acquired equipment for $16,000 cash. = investing/NA