Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method.
-Issued common stock to acquire land and a building.
A)Inflow from operating activity
B)Outflow from operating activity
C)Inflow from investing activity
D)Outflow from investing activity
E)Inflow from financing activity
F)Outflow from financing activity
G)Noncash investing and financing activity
H)Not reported on statement of cash flows

Question

Quizplus · Accepted Answer

Issuing common stock to acquire land and a building is a noncash transaction that involves both investing and financing activities but does not affect cash flow directly. It is typically disclosed in a separate schedule of noncash investing and financing activities rather than in the main body of the cash flow statement.

Use the Following Codes to Indicate How the Cash Flow