Classify each of the following transactions as a cash flow from operating, investing, or financing activities, or as a supplemental disclosure. Indicate whether the transaction has a positive or negat

You're on a roll — here are the answers to the remaining questions: Question 12: An increase in Bonds Payable (a long-term liability). Issuing bonds brings in cash from lenders. Financing Question 13: A decrease in the current asset account Prepaid Insurance. A decrease in a current asset like prepaid insurance means the expense was recognized, but no new cash was spent for that portion. This is an operating activity. Operating Question 14: A decrease in the current liability Income Taxes Payable. A decrease in a current liability means cash was paid to reduce the liability. This is an operating activity. Operating Question 15: The proceeds from issuing additional Common Stock. Issuing stock to investors brings in cash. Financing Question 17: The amortization of the cost of an intangible asset. Amortization is a non-cash expense, similar to depreciation, and is adjusted in the operating section. Operating Question 18: The exchange/conversion of long-term bonds into common stock. This transaction does not involve cash. It is a non-cash investing and financing activity. Supplemental For items 19-30, we indicate whether they will have a positive or negative effect on cash. Question 19: An increase in the balance of Prepaid Insurance. An increase in a current asset means cash was used to acquire it. Negative Question 20: A decrease in Supplies on hand. A decrease in a current asset means less cash was spent than expensed, or cash was generated (e.g., from selling excess supplies). This is a positive adjustment to net income. Positive Question 21: The proceeds from the sale of equipment formerly used in the business. Receiving proceeds means cash was collected. Positive Question 22: The Loss on the Sale of Equipment in the previous question. A loss on sale is a non-cash expense that reduced net income but did not reduce cash. It is added back to net income in the operating section. Positive Question 23: An increase in the current liability Income Taxes Payable. An increase in a current liability means the expense was incurred, but cash has not yet been paid. This means cash outflow was less than the expense. Positive Question 24: A decrease in Accounts Payable. A decrease in a current liability means cash was paid to suppliers. Negative Question 25: An increase in Accounts Receivable. An increase in a current asset means sales were made on credit, but cash has not yet been collected. This means cash inflow was less than revenue. Negative Question 26: An increase in the current liability Warranty Liability. An increase in a current liability means the expense was incurred, but cash has not yet been paid for warranty claims. This means cash outflow was less than the expense. Positive Question 27: Dividends declared and paid. Paying dividends is a direct outflow of cash. Negative What's next?