72. Blecher Co. reported the following information at the end of 2015 and 2016: 2015 2016...
72. Blecher Co. reported the following information at the end of 2015 and 2016:
2015 2016
Land $35,000 $100,000
Common stock 200,000 265,000
An analysis of Blecher’s records indicated that there were no cash flow effects resulting from the changes in the two accounts presented above. How should Blecher report the changes in these accounts on a statement of cash flows?
a. Blecher should report $65,000 for the acquisition of land as an investing activity and $65,000 for the issuance of stock as a financing activity.
b. Blecher should report $65,000 as a noncash investing and financing activity for the acquisition of land by issuing common stock.
c. Blecher should report the issuance of common stock to acquire land in the financing activity section with a net cash flow effect of zero.
d. Blecher should report the acquisition of land by issuing common stock in the investing activity section with a net cash flow effect of zero
Homework Answers
If there is no cash flow effect of this transaction then it means land is purchase (100000-35000) = 65000 by issue common Stock (265000-200000) = 65000
So answer is b) Blecher should report $65,000 as a noncash investing and financing activity for the acquisition of land by issuing common stock.
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72. Blecher Co. reported the following information at the end of
2015 and 2016:
2015 2016...
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