Exercise NO: 1

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations.\n(a) Purchase of equipment. (g) Amortization of intangible

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations.

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(a) Purchase of equipment. (g) Amortization of intangible assets.

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(b) Redemption of bonds payable. (h) Purchase of treasury stock.

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(c) Sale of building. (i) Issuance of bonds for land.

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(d) Depreciation. (j) Payment of dividends.

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(e) Exchange of equipment for furniture. (k) Increase in interest receivable on notes receivable.

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(f) Issuance of capital stock. (l) Pension expense exceeds amount funded.

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Instructions

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Classify the items as (1) operating—add to net income; (2) operating—deduct from net income; (3) investing; (4) financing; or (5) significant non-cash investing and financing activities. Use the indirect method.

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Snider Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its shareholders at the end of the first

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