Transnational Company is looking for additional capital in order to purchase a property to build their headquarters. They found an investor who was willing to sell them land worth $500,000 in exchange for stock in the company. This transaction would be shown in the financing activities section of the statement of cash flows.

Question

Quizplus · Accepted Answer

This transaction would be shown in the investing activities section of the statement of cash flows because it involves the acquisition of a long-term asset (land) in exchange for stock, not cash.

Transnational Company Is Looking for Additional Capital in Order to Purchase