1. A corporation issued $5,000,000 of 20-year bonds for cash at 105. How would the transaction be reported on the statement of cash flows?
2. Fully depreciated equipment costing $55,000 was discarded. What was the effect of the transaction on cash flows if (a) $5,000 cash is received, (b) no cash is received?
3. For the current year, Accord Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows. Will the change cause the amount of net cash flow from operating activities to be (a) larger, (b) smaller, or (c) the same as if the indirect method had been used? Explain.
4. Name five common major classes of operating cash re- ceipts or operating cash payments presented on the statement of cash flows when the cash flows from operating activities are reported by the direct method.
5. In a recent annual report, PepsiCo, Inc., reported that during the year it issued stock of $438 million for acquisitions. How would this be reported on the statement of cash flows?
6. Maytag Corporation has 49 days in accounts receivable, 46 days in inventory, and 49 days in accounts payable. What is Maytag's cash conversion cycle?