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Ch 1 Critical Thinking Question 5:
Answer the following questions:
Why are noncash transactions, such as the exchange of common stock a building, included on a statement of cash flows? How are these noncash transactions disclosed?
Chapter 1 Exercise 1:
1. Classification of activities
Classify each of the following transactions as arising from an operating (O), investing (I), financing (F), or noncash investing/financing (N) activity.
Chapter 1 Exercise 4:
4. Overview of direct and indirect methods
Evaluate the comments that follow as being True or False. If the comment is false, briefly explain why.
Chapter 1 Exercise 6:
6. Equipment transaction and cash flow reporting
Property, plant, & equipment
Dec. 31, 20X4
Dec. 31, 20X3
Less: Accumulated depreciation
New equipment purchased during 20x4 totaled $280,000. The 20x4 income statement disclosed equipment depreciation expense of $41,000 and a $9,000 loss on the sale of equipment.
Chapter 1 Problem 3:
3. Cash flow information: Direct and indirect methods
The comparative year-end balance sheets of Sign Graphics, Inc., revealed the following activity in the company's current accounts:
Increase / Decrease)
Accounts receivable (net)
The accounts payable were for the purchase of merchandise. Prepaid expenses and accrued liabilities relate to the firm's selling and administrative expenses. The company's condensed income statement follows.
SIGN GRAPHICS INC.
for the Year Ended December 31, 20x5
Less: Cost of goods sold
Less: Selling & administrative expenses
Add: gain on sale of land
Income before taxes