Sixteen rows for a composite industrial laundry, three of them split across two sections, form a complete AC302 Unit 2 cash flow classification exercise. Searches like "ac 302 unit 2 assignment example", "ac302 unit 2 sample" and "ac302 unit 2 example" land here.
What a finished AC302 Unit 2 cash flow classification exercise looks like
A grid of sixteen numbered rows in four columns: the transaction, the section, the amount, and a one-line reason citing the rule. Most rows are placed cleanly. Interest paid on the term loan and income taxes go to operating; bonds bought and held as available for sale go to investing; dividends paid to shareholders go to financing. Three rows split. A zero-coupon note repaid at 1,000,000 after issuing for 822,000 sends 178,000 of accreted interest to operating and 822,000 to financing. Contingent consideration of 310,000, paid two years after the laundry bought a hotel delivery route, sends its 250,000 acquisition-date fair value to financing and the 60,000 excess to operating. A finance lease payment divides between interest and principal. A short schedule under the grid lists the two exchanges that moved no cash.
How a AC302 Unit 2 example is structured
Rows follow the order the problem lists them in, since a grader matches answers to numbers, but the reasons column carries the real structure. Each reason names the question that decided the section: whether the cash relates to earning income, to long-term assets and investments, or to owners and lenders. Split rows show both amounts on one line with the rule that divides them, which is where the 2016 clarifications to ASC 230 changed the older textbook answer, and the reason cites that change. Insurance proceeds are placed by the nature of the loss, so the payment for a washer destroyed in a flood goes to investing while the business-interruption payment goes to operating. The noncash schedule sits below the grid instead of inside it. A three-line total at the foot confirms that every dollar in the problem was placed exactly once.
Clean placements first
Term-loan interest and income taxes in operating, available-for-sale bonds in investing, dividends to shareholders in financing, each with a one-line reason naming its rule.
The zero-coupon repayment
Issued at 822,000 and repaid at 1,000,000. The 178,000 of interest accreted over its life goes to operating; the original proceeds returned go to financing.
An earn-out paid two years later
The route purchase carried contingent consideration valued at 250,000. Paid late, that amount is financing, and the 60,000 by which the payment exceeded it is operating.
Insurance by nature of loss
Proceeds for the flooded washer are investing inflows because they replace equipment. The separate business-interruption payment replaces lost earnings, so it lands in operating.
Exchanges with no cash
Notes converted into common stock and a delivery truck bought with a seller-financed note. Both appear in a schedule below the grid, outside all three sections.
Where marks go in AC302 Unit 2
Graders look first at the rows designed to catch a memorized list. Placing all interest in financing, because the loan itself is financing, is the classic US GAAP error and costs the most, since interest paid belongs to operating. Sending the whole zero-coupon repayment to financing misses the accreted interest inside it, and sending all of the contingent consideration to investing ignores both its timing and its excess. Putting the conversion of notes into stock inside the statement, rather than in the noncash schedule, loses the disclosure marks. Reasons that restate the section name, such as operating because it is operating, earn no reasoning credit even where the placement is right, and a grid whose total fails to match the problem loses completeness points.
Get a AC302 Unit 2 example written to your instructions
Every transaction the Unit 2 problem lists is the whole input, so include every item exactly as your problem numbers it, the textbook edition if the section names one, and the rubric. Each row comes back placed, reasoned and split where the rules require, within 24-48h, and a first custom sample is free.
AC302 Unit 2 questions, answered
Why does interest paid go to operating when the loan sits in financing?
Under US GAAP, interest enters net income as an expense, so the cash paid for it is treated as part of earning that income. Only the principal borrowed and repaid is financing. International standards allow a choice, which is why some textbook problems ask for both treatments. The AC302 sample follows US GAAP unless the problem says otherwise and states that assumption in its reasons column.
What if the assigned textbook predates the 2016 clarifications?
Older editions sometimes place debt prepayment costs or zero-coupon repayments differently. If your section's text uses the earlier treatment, the grid follows the text and notes the current rule beside it, because graders mark against the materials the section uses. Most current AC302 problems reflect the updated guidance, and the sample identifies which rows would change under the older approach.
Does a classification exercise need amounts at all?
Many Unit 2 problems supply them, and amounts make the split rows meaningful, since a zero-coupon repayment cannot be divided without figures. Where a prompt lists transactions with no amounts, the grid still shows the section and reason for each and explains in words how a split row would divide. When amounts exist, a closing total proves nothing was placed twice.