Wish Corporation acquired a computer for $15,000 and paid for it in full by issuing 1,000 shares of its own common shares, par $10 (current market price $15 share). This transaction should not be reported on the statement of cash ﬂows because cash was neither paid out nor received.

Question

Quizplus · Accepted Answer

The transaction involves an exchange of non-cash assets (shares) for another non-cash asset (computer), and since no cash was involved in the transaction, it does not appear on the statement of cash flows.

Wish Corporation Acquired a Computer for $15,000 and Paid for It