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Indirect Method for Each of the Following Items, Indicate by Using the Using

Question 63

Matching

Indirect Method
For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the cash flow statement, using the indirect method. The same letter may be used more than once.

Premises:
Declaration and payment of a cash dividend
Retirement of bonds at maturity for cash
Increase in merchandise inventory during a period
Proceeds from sale of equipment at carrying amount
Decrease in accounts receivable during a period
Issue of common shares for cash
Decrease in accounts payable during a period
Loss on sale of land
Acquisition of land in exchange for common shares
Purchase of a building for cash
Responses:
Cash outflow-investing activity
Cash outflow-financing activity
Added to profit
Cash inflow-financing activity
Significant noncash investing and financing activity
Is not shown
Deducted from profit
Cash inflow-investing activity

Correct Answer:

Declaration and payment of a cash dividend
Retirement of bonds at maturity for cash
Increase in merchandise inventory during a period
Proceeds from sale of equipment at carrying amount
Decrease in accounts receivable during a period
Issue of common shares for cash
Decrease in accounts payable during a period
Loss on sale of land
Acquisition of land in exchange for common shares
Purchase of a building for cash
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