Rampart Inc. recorded the following transaction: $$\begin{array} { | l | r | r | }
\hline \text { Larnd } & 15 \mathrm { million } & \
\hline \text { Notes payable } & & 12 \mathrm { million } \
\hline \text { Cash } & & 3 \mathrm { million } \
\hline
\end{array}$$ In the statement of cash flows, this would be reported as a:
A) $3 million outflow from investing activities.
B) $15 million outflow from investing activities.
C) $3 million outflow from investing activities and $12 million noncash investing and financing activity.
D) None of these answer choices are correct.

Question

Rampart Inc. recorded the following transaction: $$\begin{array} { | l | r | r | } 
\hline \text { Larnd } & 15 \mathrm { million } & \
\hline \text { Notes payable } & & 12 \mathrm { million } \
\hline \text { Cash } & & 3 \mathrm { million } \
\hline
\end{array}$$ In the statement of cash flows, this would be reported as a:
A) $3 million outflow from investing activities.
B) $15 million outflow from investing activities.
C) $3 million outflow from investing activities and $12 million noncash investing and financing activity.
D) None of these answer choices are correct.

Quizplus · Accepted Answer

The purchase of land for $15 million, financed by $12 million in notes payable and $3 million in cash, would be reported as a $3 million outflow from investing activities (for the cash portion) and the $12 million in notes payable as a noncash investing and financing activity.

Rampart Inc In the Statement of Cash Flows, This Would Be Reported