Use the information below to answer the following question(s):Howard Co. uses the direct method to prepare its operating activities section of the statement of cash flows. Indicate how each event affects net income and the three types of activities on the statement of cash flows. In the net income column, use the letter "I" to indicate increase, the letter "D" to indicate decrease, and the letters "NA" to indicate no effect on net income. In the three cash flow columns, use the letter "I" to indicate cash inflow, the letter "D" to indicate cash outflow, and the letters "NA" to indicate no effect on cash flows.Howard Co. purchased land costing $25,000 by paying $8,000 cash and issuing a note payable for the remaining balance.
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What will be an ideal response?
(NA) (NA) (D) (NA)
The $8,000 paid for the land is reported as a cash outflow in the investing activities section of the statement of cash flows. The issuance of the note for $17,000 (or Purchase price of $25,000 ? Cash paid of $8,000) is a noncash investing and financing activity, which is reported in the schedule of noncash investing and financing activities.
Business
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What will be an ideal response?
(NA) (NA) (D) (NA)
The $8,000 paid for the land is reported as a cash outflow in the investing activities section of the statement of cash flows. The issuance of the note for $17,000 (or Purchase price of $25,000 ? Cash paid of $8,000) is a noncash investing and financing activity, which is reported in the schedule of noncash investing and financing activities.
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