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Ingles Corp., a private company reporting under ASPE, engaged in the following transactions.For each transaction, indicate where, if at all, it would be classified on the statement of cash flows.
-Issue of preferred shares for cash:
A)operating activities section
B)investing activities section
C)financing activities section
D)does not represent a cash flow

Question

Use the following information for questions 
Ingles Corp., a private company reporting under ASPE, engaged in the following transactions.For each transaction, indicate where, if at all, it would be classified on the statement of cash flows.
-Issue of preferred shares for cash:
A)operating activities section
B)investing activities section
C)financing activities section
D)does not represent a cash flow

Quizplus · Accepted Answer

The issuance of preferred shares for cash is a financing activity because it involves raising capital to fund the company's operations or to pay off debts. Financing activities are related to changes in the size and composition of the equity capital and borrowings of the entity.

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