A company purchases a $300,000 building,paying $200,000 in cash and signing a $100,000 promissory note.What will be reported on the statement of cash flows as a result of this transaction?
A) A $300,000 cash outflow from investing activities
B) A $200,000 cash outflow from investing activities and a $100,000 cash inflow from financing activities
C) A $200,000 cash outflow from investing activities and a $100,000 noncash transaction
D) A $300,000 cash outflow from investing activities and a $100,000 cash inflow from financing activities

Question

Quizplus · Accepted Answer

The company paid $200,000 in cash, which is an outflow from investing activities. The $100,000 promissory note is a noncash transaction and is not reported in the cash flow statement.

A Company Purchases a $300,000 Building,paying $200,000 in Cash and Signing