Question

Which of the following transactions would be shown in the non-cash investing and financing activities section of the statement of cash flows?

		settled a long-term Note Payable by issuing Common Stock
		sold equipment with book value of $6,500 in exchange for $6,500 cash
		purchased land for $30,000 cash
		issued 20,000 shares of stock at $4 per share

Answer 1

Settled a long-term Note Payable by issuing Common Stock would be shown in the non-cash investing and financing activities section of the statement of cash flows.

First option is correct option.

Non- cash investing and financing activities are these activities in which no cash is involved. It includes:

- Purchase of long term asset by issuing bonds/note payable or common stock.

- Repayment of note payable or bonds by issuing common stock.

All other transactions in option sold equipment with book value of $6,500 in exchange for $6,500 cash, purchased land for $30,000 cash and issued 20,000 shares of stock at $4 per share involve cash.

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