Use the following information for questions 10-11.
Duncan Corp. purchased a building, paying part of the purchase price in cash and issuing a mortgage note payable to the seller for the balance.
-In a statement of cash flows, what amount is included in financing activities for the above transaction?
A) the cash payment
B) the full purchase price
C) zero (but disclosed in the notes)
D) the amount mortgaged

Question

Quizplus · Accepted Answer

The amount included in financing activities for the transaction is zero because the issuance of a mortgage note payable is a non-cash financing activity. However, it should be disclosed in the notes to the financial statements.

Use the Following Information for Questions 10-11