The acquisition of land by issuing common stock is
A) only reported if the statement of cash flows is prepared using the direct method.
B) a cash transaction that is reported in the investing section in the body of the statement of cash flows.
C) a noncash transaction that is reported in the operating section in the body of the statement of cash flows.
D) a noncash transaction that is disclosed in a supplementary schedule attached to the statement of cash flows.

Question

Quizplus · Accepted Answer

The acquisition of land by issuing common stock is a noncash transaction and is disclosed in a supplementary schedule attached to the statement of cash flows. This is because it does not involve any exchange of cash but rather the issuance of stock in exchange for the land. Therefore, it is not reported in the operating, investing or financing section of the statement of cash flows.

The Acquisition of Land by Issuing Common Stock Is