Sub: Economics Topic: Financial Economics
Question:
Selected transactions of Eller Company are listed below.
ClassOf1 provides exert guidance for College, Graduate and High school homewo rk and live online tu toring on subjects like
Finance, Marketing, Statistics, Economics and others. Check out mo re solved problems in our Solution Libra ry.
1. Common stock is sold for cash above par value.
2. Bonds payable are issued for cash at a discount.
3. Interest receivable on a short-term note receivable is collected.
4. Land is sold for cash at book value.
5. Accounts payable are paid in cash.
6. Equipment is purchased by signing a 3-year, 10% note payable.
7. Cash dividends on common stock are declared and paid.
8. 100 shares of XYZ common stock are purchased for cash.
9. Merchandise is sold to customers for cash.
10. Bonds payable are converted into common stock.
Instructions
Classify each transaction as either
(a) an operating activity,
(b) an investing activity,
(c) a financing activity, or
(d) a noncash investing and financing activity.
www.classof1.com
*The Homework solutions from ClassOf1 a re intended to help the s tudent understa nd the approa ch to sol vi ng the problem and not for submi tting the same in
lieu of your a cademic submissions for grades .

Sub: Economics Topic: Financial Economics
Solution:
1 Common stock is sold for cash above par value ('C) a financing activity
2 Bonds payable are issued for cash at a discount ('C) a financing activity
Interest receivable on a short-term note
3 receivable is collected (B) an investing activity
4 Land is sold for cash at book value (B) an investing activity
5 Accounts payable are paid in cash (A) an operating activity
Equipment is purchased by signing a 3-year, 10% a noncash investing and financing
6 note payable (D) activity
Cash dividends on common stock are declared
7 and paid ('C) a financing activity
100 shares of XYZ common stock are purchased
8 for cash ('C) a financing activity
9 Merchandise is sold to customers for cash (A) an operating activity
a noncash investing and financing
10 Bonds payable are converted into common stock (D) activity
** End of the Solution **
ClassOf1 provides exert guidance for College, Graduate and High school homewo rk and live online tu toring on subjects like
Finance, Marketing, Statistics, Economics and others. Check out mo re solved problems in our Solution Libra ry.
www.classof1.com
*The Homework solutions from ClassOf1 a re intended to help the s tudent understa nd the approa ch to sol vi ng the problem and not for submi tting the same in
lieu of your a cademic submissions for grades .