Klein Corp.acquired land by issuing its common stock.How should this transaction be disclosed when a statement of cash flows is prepared?
A) In a supplemental schedule of noncash investing and financing activities or in a note.
B) The acquisition of land should be reported as an investing activity and the issuance of the stock as a financing activity.
C) Using the master T-account approach.
D) The transaction does not need to be disclosed.

Question

Quizplus · Accepted Answer

This transaction involves an exchange of non-cash assets (land for stock), so it should be disclosed in a supplemental schedule of noncash investing and financing activities or in a note, as it does not involve cash flows directly.