ANSWER KEY Below are a number of transactions that took place in Seneca Company during the past year:

Below are a number of transactions that took place in Seneca Company during the past year:

a. Common stock was sold for cash

b. Interest was paid on a note, decreasing Interest Payable

c. Bonds were retired

d. A long-term loan was made to a subsidiary

e. Interest was received on the loan in (d) above, reducing Interest Receivable

f. A stock dividend was declared and issued on common stock

g. A building was acquired by issuing shares of common stock

h. Equipment was sold for cash

i. Short-term investments were sold

j. Cash dividends were declared and paid

k. Preferred stock was converted into common stock

l. Deferred Income Taxes, a long-term liability, was reduced

m. Dividends were received on stock of another company held as an investment

n. Equipment was purchased by giving a long-term note to the seller

Required:

Prepare an answer sheet with the following column headings:

Transaction

Source, Use or Neither

Activity/Operating Investing Financing

Reported in a Seperate Schedule

Not on Statement

*Enter the letter of the transaction in the left column and indicate whether the transaction would be a source, use or neither. Then place an X in the appropriate column to show the proper classification of the transaction on the statement of cash flows, or to show if it would be reported in a seperate schedule or not reported on the statement at all.

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