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Harlowe 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 
Harlowe 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, as it represents an inflow of cash to the company from its capital providers. This would be classified under the financing activities section of the statement of cash flows.

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