Part 1: Indicate which of the following current assets and current liabilities and operating accounts(O) and thus included in the adjustment of net income to cash flow from operating activities and which are cash (C), investing (I), or financing(F) accounts.
a. accounts payable
b. accounts receivable
c. notes payable (to bank)
d. marketable securities
e. accrued expenses
f. inventory
g. prepaid expenses
h. current portion of long-term debt
I. dividends payable
j. income taxes payable
k. interest payable
l. certificates of deposit.
Part 2: Indicate whether each of the following items would result in net cash flow from operating activities being higher(H) or lower (L) than net income.
a. decrease in accounts payable
b. depreciation expense
c. decrease in inventory
d. gain on sale of assets
e. increase in accounts receivable
f. increase in deferred tax liabilities
g. decrease in accrued liabilities
h. increase in prepaid expense
I. increase in deferred revenue
j. decrease in interest receivable
Part 3: Indicate whether each of the following events would cause an inflow or an outflow of cash and whether it would affect the investing (I), or financing(F) activities on the statement of cash flows.
a. repayment of long-term debt
b. sales of marketable securities
c. repurchase of a company's common stock
d. sales of common stock to investors
e. purchase of equipment
f. payment of dividends.
g. purchase of marketable securities
h. borrowing from the bank
I. sale of building
j. acquisition of company