Winnie has a defined benefit pension plan that presents its

Question

Research Case #1

You have recently been hired as accounting staff at Winnie Manufacturing Company.  The company is preparing its December 31, 2017 financial statements and there were a number of transactions that occurred during the past year.  The accounting department needs to determine the appropriate Cash Flow Statement classification for these items.

Your supervisor, Nancy Moreno, she has asked you to research Operating, Investing and Financing Activities in the Codification to confirm the appropriate treatment.  She would like you to prepare a memo (including all appropriate sections) addressed to her.  The purpose of this memo is to convey your recommendation for whether each of these items should be classified as Operating, Investing or Financing on Statement of Cash Flows.  As part of your research, she would like you to answer the following questions and include the answers in your memo to support your recommendation. 

Be sure to include all Codification references supporting your research.

1. Per the Glossary, what is the definition of Operating Activities?  Investing Activities?  Financing Activities?
2. Winnie has a defined benefit pension plan that presents its financial information in accordance with Topic 960.  Does Winnie need to prepare a Statement of Cash Flows for its Plan?
3. Should Winnie report its calculation of Cash Flow per Share on its Financial Statements?

1. Based on the criteria in the Codification (include the reference for each item separately), explain whether each of the following transactions that occurred during the year would be reported as an Operating, Investing or Financing Activity, and why.  If it would not be reported on the Statement of Cash Flows, indicate how it should be reported and provide Codification support for that treatment.
2. Land was purchased at the beginning the year in exchange for a note payable of $200,000.  The note is due in full in 5 years.
3. Winnie constructed a building on that land, total construction cost was $50,000 and was fully paid by the end of the year.
4. Winnie paid $200,000 cash to retire bonds early.
5. Interest of $7,500 was paid in cash for Winnie's outstanding debt.
6. Winnie holds several debt investments.  It sold several of those investments classified as available-for-sale during the year.  The transaction resulted in a $5,000 gain for Winnie.
7. Winnie declared and paid $150,000 in cash dividends.
8. Winnie declared and paid an additional $50,000 of stock dividends.
9. 25,000 shares of Common Stock were issued at par.