Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 54

Activity Classification
During the last 2 years of operations, Barnes Company had the following transactions:
a. Purchased a new plant for $5,000,000.
b. Issued bonds with a 6-year maturity date for $2,000,000.
c. Reported profits of $7,000,000 for the most recent year.
d. Sold equipment for $500,000.
e. Paid cash dividends of $2,000,000.
f. Sold a 30% interest in a company.
g. Retired a long-term note payable.
h. Reported a loss for the year ($500,000).
i. Issued common stock for $1,000,000.
Required:
Classify each of these transactions as an operating activity, an investing activity, or a financing activity and indicate whether the activity is a source of cash or a use of cash.