Question Details

Increase in merchandise inventory during a period 




Set 1 — Indirect Method

1.	For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.

	A.	Added to net income
	B.	Deducted from net income
	C.	Cash outflow—investing activity
	D.	Cash inflow—investing activity
	E.	Cash outflow—financing activity
	F.	Cash inflow—financing activity
	G.	Significant noncash investing and financing activity

____	1.	Decrease in accounts payable during a period

____	2.	Declaration and payment of a cash dividend.

____	3.	Loss on sale of land.

____	4.	Decrease in accounts receivable during a period.

____	5.	Redemption of bonds for cash.

____	6.	Proceeds from sale of equipment at book value.

____	7.	Issuance of common stock for cash.

____	8.	Purchase of a building for cash.

____	9.	Acquisition of land in exchange for common stock.

____	10.	Increase in merchandise inventory during a period .







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