Analysis of comparative balance sheets


Problem: An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Solomon Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary.

(a) Payment of interest on notes payable

(b) Exchange of land for patent

(c) Sale of building at book value

(d) Payment of dividends

(e) depreciation

(f) Receipt of dividends on investment in stock

(g) Receipt of interest on notes receivable

(h) Issuance of capital stock

(i) Amortization of patent

(j) Issuance of bonds for land

(k) Purchase of land

(l) conversion of bonds into common stock

(m) loss on sale of land

(n) Retirement of bonds

Instructions: Indicate how each item should be classifiecd in the statement of cash flows using these four major classifications: operating activity (indirect method), investing activity, financing activity, and significant noncash investing and financing activity.

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Accounting Basics: Analysis of comparative balance sheets
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