Response to the following questions:
1. Assume that a company purchases land for $100,000, paying $20,000 cash and borrowing the remainder with a longterm note payable. How should this transaction be reported on a statement of cash flows?
2. On June 3, a company borrows $50,000 cash by giving its bank a 160-day, interest-bearing note. On the statement of cash flows, where should this be reported?
3. If a company reports positive net income for the year, can it also show a net cash outflow from operating activities? Explain.
4. Is depreciation a source of cash flow?