Allen Moving Pictures Company uses the indirect method to prepare its statement of cash flows.The Treasury Stock account had a debit balance of $9,000 at the beginning of the year,and a debit balance of $13,000 at the end of the year.No Treasury Stock was sold during the year.The financing section of the statement of cash flows will show a positive cash flow of $4,000 for the buy back of Treasury Stock.

Question

Quizplus · Accepted Answer

The financing section will show a negative cash flow of $4,000 because the increase in the Treasury Stock account indicates a purchase, not a sale, of treasury stock.

Allen Moving Pictures Company Uses the Indirect Method to Prepare