A company reported the following information: An analysis of records indicated that there were no cash flow effects resulting from the changes in the two accounts presented above. How should the changes in these accounts be reported on a statement of cash flows?
A)The company should report $250,000 for the sale of land as an investing activity and $250,000 for the issuance of stock as a financing activity.
B)The company should report $250,000 as a noncash investing and financing activity for the acquisition of land by issuing common stock.
C)The company should report the issuance of common stock to acquire land in the financing activity section with a net cash flow effect of zero.
D)The company should report the acquisition of land by issuing common stock in the investing activity section with a net cash flow effect of zero

Question

A company reported the following information:  An analysis of records indicated that there were no cash flow effects resulting from the changes in the two accounts presented above. How should the changes in these accounts be reported on a statement of cash flows?
A)The company should report $250,000 for the sale of land as an investing activity and $250,000 for the issuance of stock as a financing activity. 
B)The company should report $250,000 as a noncash investing and financing activity for the acquisition of land by issuing common stock. 
C)The company should report the issuance of common stock to acquire land in the financing activity section with a net cash flow effect of zero. 
D)The company should report the acquisition of land by issuing common stock in the investing activity section with a net cash flow effect of zero

Quizplus · Accepted Answer

The Answer of A company reported the following information:  An analysis of records indicated that there were no cash flow effects resulting from the changes in the two accounts presented above. How should the changes in these accounts be reported on a statement of cash flows?
A)The company should report $250,000 for the sale of land as an investing activity and $250,000 for the issuance of stock as a financing activity. 
B)The company should report $250,000 as a noncash investing and financing activity for the acquisition of land by issuing common stock. 
C)The company should report the issuance of common stock to acquire land in the financing activity section with a net cash flow effect of zero. 
D)The company should report the acquisition of land by issuing common stock in the investing activity section with a net cash flow effect of zero

A Company Reported the Following Information: an Analysis of Records