Assume that Company A uses indirect method to depict cash flows. Indicate where, if at all,...
Assume that Company A uses indirect method to depict cash flows. Indicate where, if at all, a stock issued for purchasing a patent would be classified on the statement of cash flows.
a. Operating activities section
b. Investing activities section
c. Financing activities section
d. Does not represent a cash flow
Homework Answers
Solution:
Option d. is the correct choice.
This transaction does not involve any cash outflow or inflow because only 'Stock' is issued for purchasing a patent and thus no cash is given.
So, this does not represent a cash flow.
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