Novak Corporation is preparing its 2014 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the sta
Novak Corporation is preparing its 2014 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2014 statement of cash flows. Code Letter Effect A Added to net income in the operating section D Deducted from net income in the operating section.
\r\nR-I Cash receipt in investing section
\r\nP-I Cash payment in investing section
\r\nR-F Cash receipt in financing section
\r\nP-F Cash payment in financing section
\r\nN Noncash investing and financing activity
\r\nItems
\r\n____ (a) Purchase of land and building. ____ (j) Increase in accounts payable.
\r\n____ (b) Decrease in accounts receivable. ____ (k) Decrease in accounts payable.
\r\n____ (c) Issuance of stock. ____ (l) Loan from bank by signing note.
\r\n____ (d) Depreciation expense. ____ (m) Purchase of equipment using a note.
\r\n____ (e) Sale of land at book value. ____ (n) Increase in inventory.
\r\n____ (f) Sale of land at a gain. ____ (o) Issuance of bonds.
\r\n____ (g) Payment of dividends. ____ (p) Redemption of bonds payable.
\r\n____ (h) Increase in accounts receivable. ____ (q) Sale of equipment at a loss.
\r\n____ (i) Purchase of available-for-sale investment. ____ (r) Purchase of treasury stock.