New York Production Company uses the indirect method to prepare its statement of cash flows.The Treasury Stock account had a debit balance of $8,000 at the beginning of the year and a debit balance of $16,000 at the end of the year.No treasury stock was sold during the year.The financing section of the statement of cash flows will show a positive cash flow of $8,000 for the buyback of treasury stock.

Question

Quizplus · Accepted Answer

The financing section will show a negative cash flow of $8,000 because the increase in the Treasury Stock account indicates a cash outflow for the purchase of treasury stock.

New York Production Company Uses the Indirect Method to Prepare