Classify transactions by activity. Indicate impact on cash and profit. (LOI) AP (b) P17-1B You are provided with the following transactions that took place during a recent fiscal year: (a) Transaction Classification 1. Paid telephone bill for the month. 2. Sold land for cash, at a gain. 3. Acquired land by issuing common shares. 4. Paid a cash dividend to preferred shareholders. 5. Performed services for cash. 6. Performed services on account. 7. Purchased inventory for cash. 8. Purchased inventory on account. 9. Paid income tax. 10. Made principal repayment on a trade note payable. 11. Paid semi-annual bond interest. 12. Received rent from a tenant in advance. 13. Recorded depreciation expense. 14. Reacquired common shares at a price greater than the average cost of the shares. 15. Issued preferred shares for cash. 16. Collected cash from customers on account. 17. Issued a note payable. 18. Paid insurance for the month Instructions Assuming the company is reporting under IFRS, complete the above table for each of the following requirements, assuming none of the transactions were previously accrued. The first one has been done for you as an example. (a) Classify each transaction as an operating activity (O), an investing activity (1), a financing activity (F), or a noncash transaction (NC) on the cash flow statement. If there is choice in how a transaction is classified, indicate the alternative classifications, Problems: Set B CHAPTER 17 945 (b) Specify whether the transaction will increase (+), decrease (-), or have no effect (NE) on cash reported on the balance sheet TAKING IT FURTHER Explain how an operating activity can decrease cash but not decrease profit