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Question : Set 2 — Direct Method a211.For each of the following items,

Set 2 — Direct Method

a211.For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.

A.Added in determining cash receipts from customers

B.Deducted in determining cash receipts from customers

C.Added in determining cash payments to suppliers

D.Deducted in determining cash payments to suppliers

E.Cash outflow—investing activity

F.Cash inflow—investing activity

G.Cash outflow—financing activity

H.Cash inflow—financing activity

I.Significant noncash investing and financing activity

J.Is not shown

____              1.Decrease in accounts payable during a period.

____              2.Declaration and payment of a cash dividend.

____              3.Decrease in accounts receivable during a period.

____              4.Depreciation expense.

____              5.Conversion of bonds payable into common stock.

____              6.Decrease in merchandise inventory during a period.

____              7.Sale of equipment for cash at book value.

____              8.Issuance of preferred stock for cash.

____              9.Purchase of land for cash.

____              10.Loss on sale of a plant asset.

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