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Kiley Corporation had these transactions during 2017.
Kiley Corporation had these transactions during 2017.Analyze the transactions and indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity.
A) Purchased a machine for $30,000, giving a long-term note in exchange.
B) Issued $50,000 par value common stock for cash.
C) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.
D) Declared and paid a cash dividend of $13,000.
E) Sold a long-term investment with a cost of $15,000 for $15,000 cash.
F) Collected $16,000 from sale of goods.
G) Paid $18,000 to suppliers.

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Answer:

Operating Activities in the Cashflow statement refer to transactions involving the day to day running of the business in relation to the core business of the company such as revenue.

Investing Activities refer to capital transactions such as the purchase or disposal of fixed assets. It also includes the purchase or sale of securities belonging to other companies.

Financing Activities refer to the raising of money for the business and hence include Equity ( and dividends) and long term debt.

Non-cash investing and financing activity are Investing or Financing activities that were done without using cash but rather are exchanged.

A) Purchased a machine for $30,000, giving a long-term note in exchange. - Non-cash Investing and Financing activity

B) Issued $50,000 par value common stock for cash.  - Financing Activities

C) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.  - Non-cash Investing and Financing activity

D) Declared and paid a cash dividend of $13,000.  - Financing Activities

E) Sold a long-term investment with a cost of $15,000 for $15,000 cash.  - Investing Activities

F) Collected $16,000 from sale of goods.  - Operating Activities

G) Paid $18,000 to suppliers. - Operating Activities

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