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A review of the statement of financial position of Matvei Company revealed the following changes in the account balances:

Required:

1.  For each of the above items, indicate whether it produces a cash inflow or a cash outflow.

a. Increase in accounts receivable Cash inflow Cash outflow b. Increase in retained earnings Cash inflow Cash outflow c. Decrease in salaries payable Cash inflow Cash outflow d. Increase in common shares Cash inflow Cash outflow e. Decrease in inventory Cash inflow Cash outflow f. Increase in accounts payable Cash inflow Cash outflow g. Decrease in long-term debt Cash inflow Cash outflow h. Increase in property, plant, and equipment Cash inflow Cash outflow

2.  Classify each change as a cash flow from operating activities (indirect method), a cash flow from investing activities, or a cash flow from financing activities.

a. Increase in accounts receivable Operating activities Investing activities Financing activities b. Increase in retained earnings Operating activities Investing activities Financing activities c. Decrease in salaries payable Operating activities Investing activities Financing activities d. Increase in common shares Operating activities Investing activities Financing activities e. Decrease in inventory Operating activities Investing activities Financing activities f. Increase in accounts payable Operating activities Investing activities Financing activities g. Decrease in long-term debt Operating activities Investing activities Financing activities h. Increase in property, plant, and equipment Operating activities Investing activities Financing activities

 

One Minute Reflection:

What are the two of Lee’s six love styles and which one best describes the approach to love and why?