Concept: Significant Non-cash Investing and Financing Activities6m
A building was acquired in exchange for 20,000 shares of the company's $10 par common stock. This transaction is reported on a statement of cash flows as
A. a financing activity.
B. an operating activity.
C. a noncash investing and financing activity.
D. an investing activity.
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.
The acquisition (purchase) of land in exchange for shares of its own common stock is
A) only reported in the statement of cash flows if the direct method is used
B) a noncash transaction and would be reported in the body of the statement of cash flows
C) a cash transaction and would be reported in the body of the statement of cash flows
D) a noncash transaction that is not reported in the body of a statement of cash flows
Which of the following would be considered a noncash investing or financing transaction?
a. Purchase of a long-term asset using a long-term note payable
b. Exchange of a building for stock
c. Retirement of debt by issuing stock
d. All of the above
e. None of the above
During the year, J Company acquired a new building, issuing common stock in payment. The transaction would be reported on the Cash Flow Statement in:
a) Cash flows from Operating Activities section
b) Cash flows from Investing Activities section
c) Cash flows from Financing Activities section
d) A separate supplementary schedule appended to the Statement
E Company acquired land valued at $56,000 for 4,200 shares of its stock. Where on the Statement of Cash flows does this transaction activity appear?
a) Operating Activities
b) Investing Activities
c) Financing Activities