Question: 1. Classify each of the following items as an operating, investing, or financing activity.
1. Dividends paid.
2. Repayment of notes payable.
3. Payment for inventory.
4. Purchase of equipment.
5. Interest paid.
2. The following selected transactions occur during the first year of operations. Determine how each should be reported in the statement of cash flows.
1. Issued one million shares of common stock at $20 per share.
2. Paid $75,000 to suppliers for inventory.
3. Paid a dividend of $1 per share to common stockholders.
4. Loaned $50,000 to an employee and accepted a note receivable.