Significant Noncash Activities Video Lessons

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Problem: A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares of its common stock (par $10 per share; no market price was quoted). How should this transaction be reported on the statement of cash flows?  a. Report $12,000 as outflow of cash on the statement of cash flows. b. Report $12,000 as an inflow of cash on the statement of cash flows. c. Report the flows both on the financing section and the investing section of the cash-flow statement. d. Report it on the schedule of significant noncash transactions.

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Problem Details

A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares of its common stock (par $10 per share; no market price was quoted). How should this transaction be reported on the statement of cash flows? 

a. Report $12,000 as outflow of cash on the statement of cash flows.

b. Report $12,000 as an inflow of cash on the statement of cash flows.

c. Report the flows both on the financing section and the investing section of the cash-flow statement.

d. Report it on the schedule of significant noncash transactions.

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