Identify the type of cash flow activity for each of the following events (operating, investing, or financing):

Identify the type of cash flow activity for each of the following events (operating, investing, or financing):

a. Redeemed bonds
b. Purchased patents
c. Purchased buildings
d. Purchased treasury stock
e. Sold long-term investments
f. Paid cash dividends
g. Issued common stock
h. Issued preferred stock
i. Net income
j. Issued bonds
k. Sold equipment


Answer:
a. financing
b. investing
c. investing
d. financing
e. investing
f. financing
g. financing
h. financing
i. operating
j. financing
k. investing

Salud Company reports the following information. Use the indirect method to prepare only the operating

Salud Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2015. (Amounts to be deducted should be indicated with a minus sign.)

Selected 2015 Income Statement Data			Selected Year-End 2015 Balance Sheet Data
Net income	$490,000		Accounts receivable increase	$44,800
Depreciation expense	87,500		Prepaid expenses decrease	12,600
Gain on sale of machinery	20,000		Accounts payable increase	8,400
			Wages payable decrease.	2,200

a.	Equipment with a book value of $83,000 and an original cost of $163,000 was sold at a loss of $34,000.
b.	Paid $109,000 cash for a new truck.
c.	Sold land costing $320,000 for $405,000 cash, yielding a gain of $85,000.
d.	Long-term investments in stock were sold for $92,800 cash, yielding a gain of $15,500.

   

Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Explanation:

Cash received from sale of equipment = Book value − loss = $83,000 − $34,000 = $49,000

An economy operating its plant and equipment at full capacity implies a capacity utilization rate of

An economy operating its plant and equipment at full capacity implies a capacity utilization rate of ________. 85 percent
 Explanation:

At the beginning of the section, “Full Employment and Full Production,” we state that utilizing 85 or 90 percent of our plant and equipment would employ virtually all of our usable productive capacity.

The full-production level of our economy implies ________.  an efficient allocation of our resources
 Explanation:

In the section, “Full Employment and Full Production,” we state that “By full production we mean that our nation’s resources are being allocated in the most efficient manner possible.”

The production possibilities curve represents ________.  our economy at full production and full employment
 Explanation:

In the section, “Productive Efficiency,” we state that only on the production possibilities curve can we attain productive efficiency. This is attained when the maximum possible output of any one good is produced, given the output of other goods.

If we are operating inside our production possibilities curve ________.  there is definitely less than full employment
 Explanation:

If our economy is operating on its production possibilities curve, we are at full employment. Therefore, if we are operating inside the curve, there is definitely less than full employment.

The closer we are to the origin and farther away we are from the production possibilities curve ________. the more unemployment there is 

Explanation:

At the origin, we have an unemployment rate of 100%. So as we approach the origin, the more unemployment there is.

Economic growth will occur if any of the following occur except ________. the level of consumption rises and the savings rate falls
 Explanation:

If consumption rises and savings falls, less money will be available for investment in new plant, equipment, and technology. These key elements of economic growth would have less scarce resources to utilize.