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Accounting: Statement of Cash Flows: Revenue and Cost Classification

Please note these exercises are about revenue and cost classification (operations, finance, investment) for the Statement of Cash Flows. They do not represent an exhaustive or comprehensive exercise in cost classification.

Statement of Cash Flows Exercise B (10 points)

The following items were taken from a recent cash flow statement. Note that different companies use slightly different titles for the same item. Mark each item in the list as a cash flow from operating activities (O), investing activities (I), or financing activities (F). Also place parentheses around the letter only if it is a cash outflow.
______ (1) Purchases of property, plant, and equipment
______ (2) Cash received from customers
______ (3) Cash paid for dividends to stockholders
______ (4) Cash paid to suppliers
______ (5) Income taxes paid
______ (6) Cash paid to employees
______ (7) Cash proceeds received from sale of investment in another company
______ (8) Repayment of borrowings

Statement of Cash Flows, Exercise C (25 Points)
Snodgrass Medical Corporation is preparing the annual financial statements for the stockholders. A statement of cash flows with appropriate revenue and cost classification must be prepared. The following data on cash flows were developed for the entire year ended December 31, 2014: cash collections from health services provided, $280,000; cash expended for operating expenses, $175,000; sale of unissued company stock for cash, $30,000; cash dividends declared and paid to stockholders during the year, $18,000; and payments on long-term notes payable, $80,000. During the year, a tract of land held as an investment was sold for $10,000 cash (which was the same price that Snodgrass Medical had paid for the land in 2010), and $48,000 cash was expended for two new machines. The machines were used in the company’s clinic. The beginning-of-the-year cash balance was $63,000.
Prepare the statement of cash flows for 2014. Follow the format illustrated in the chapter. Use the format from page 188 of Baker and Baker, Health Care Finance. Note that you have data for a single year and thus need a column articulating the activity, and a second column reflecting the dollar value and whether each of the above transactions was a cash in-flow or out-flow.

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Statement of Cash Flows Exercise B (10 points)

The following items were taken from a recent cash flow statement. Note that different companies use slightly different titles for the same item. Mark each item in the list as a cash flow from operating activities (O), investing activities (I), or financing activities (F). Also place parentheses around the letter only if it is a cash outflow.
___ (F)_ (1) Purchases of property, plant, and equipment
___O__ (2) Cash received from customers
___(F)___ (3) Cash paid for dividends to stockholders...
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