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6 March, 23:09

Destiny Corporation is preparing its statement of cash flows by the indirect method. Destiny has the following items for you to consider in preparing the statement:

O + a. Increase in accounts payable

F - b. Payment of dividends

O - c. Decrease in accrued liabilities

F + d. Issuance of common stock

O - e. Gain on sale of building

O + f. Loss on sale of land

O + g. Depreciation expense

O - h. Increase in merchandise inventory

O + i. Decrease in accounts receivable

I - j. Purchase of equipment

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  1. 6 March, 23:26
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    O + a. Increase in accounts payable

    F - b. Payment of dividends

    O - c. Decrease in accrued liabilities

    F + d. Issuance of common stock

    O - e. Gain on sale of building

    O + f. Loss on sale of land

    O + g. Depreciation expense

    O - h. Increase in merchandise inventory

    O + i. Decrease in accounts receivable

    I - j. Purchase of equipment

    Explanation:

    The requirement of the question is to indicate whether each of the items is an addition to addition to net income (O+) or subtraction (O-) under operating activities section, investing activity (cash inflow I+), (cash outflow I-), financing activity (cash inflow F+), (cash outflow F-) and activity not used to prepare the cash flows.

    All the signs above are correct.
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