If common stock was issued to acquire an $8,000 machine, how would the transactionappear on the statement of cash flows?
A) It would depend on whether you are using the direct or the indirect method.
B) It would be a positive $8,000 in the financing section and a negative $8,000 in the investing section.
C) It would be a negative $8,000 in the financing section and a positive $8,000 in the investing section.
D) It would not appear on the statement of cash flows but rather on a schedule of noncash investing and financing activities.

Question

Quizplus · Accepted Answer

Issuing common stock to acquire a machine is a non-cash transaction and would not appear in the cash flows statement. Instead, it is disclosed in the non-cash investing and financing activities section.

If Common Stock Was Issued to Acquire an $8,000 Machine