Brown,Inc.owed one of its creditors $350,000,but it did not have enough cash to repay the debt.Following lengthy negotiations,the parties agreed that Brown,Inc.would issue 50,000 shares of common stock to settle the debt.On the statement of cash flows,this transaction is shown in the ________.

Question

Quizplus · Accepted Answer

This transaction involves issuing stock to settle a debt, which is a non-cash financing activity. It does not involve cash flow, so it is reported in the non-cash investing and financing activities section.

Brown,IncOwed One of Its Creditors $350,000,but It Did Not Have