Tabares Corporation had these transactions during 2020. Indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity. (a) Issued $50,000 par value common stock for cash. select a type of activity (b) Purchased a machine for $30,000, giving a long-term note in exchange. select a type of activity (c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. select a type of activity (d) Declared and paid a cash dividend of $18,000. select a type of activity (e) Sold a long-term investment with a cost of $15,000 for $15,000 cash. select a type of activity (f) Collected $16,000 from sale of goods. select a type of activity (g) Paid $18,000 to suppliers.

Question

Business

Moriah Rodriguez

25 March, 09:02

Tabares Corporation had these transactions during 2020. Indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity. (a) Issued $50,000 par value common stock for cash. select a type of activity (b) Purchased a machine for $30,000, giving a long-term note in exchange. select a type of activity (c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. select a type of activity (d) Declared and paid a cash dividend of $18,000. select a type of activity (e) Sold a long-term investment with a cost of $15,000 for $15,000 cash. select a type of activity (f) Collected $16,000 from sale of goods. select a type of activity (g) Paid $18,000 to suppliers.

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Answers (1)

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Jovanny Summers · Answer 1

Answer and Explanation:

As per the data given in the question, the classification of the transactions are as follows

a) Issued $50,000 par value common stock for cash = it is a financing activity as it increased the common stock and cash which shows in the financing activity

b) Purchased a machine for $30,000, It is a Non cash investing giving a long-term note in exchange and financing activity. As it does not include any cash transactions

c) Issued $200,000 par value common stock upon conversion of bonds having. It is a Non cash investing a face value of $200,000 and financing activity as it does not involve any cash transactions

d) Declared and paid a cash dividend of $18,000 = It is a financing activity as the dividend is deducted from the statement of stockholder equity

e) Sold a long-term investment with a cost of $15,000 for $15,000 cash = It is an Investing activity as there is a sale of long term investment, the same is recorded in the investing activity in a positive sign because it is an outflow of cash

f) Collected $16,000 from sale of goods. It is an operating activity as cash is collected so the same is come under the operating activity

g) Paid $18,000 to suppliers. This transaction comes under the operating activity in a negative sign