Question

In 2020, Swifty Inc. issued 1,200 shares of $10 par value common stock for land worth $35,500.

(a) Prepare Swifty’s journal entry to record the transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
select an account title     Cash    Common Stock    Land    No Entry    Paid-in Capital in Excess of Par—Common Stock    Paid-in Capital in Excess of Par—Preferred Stock    Preferred Stock    Retained Earnings	enter a debit amount	enter a credit amount
select an account title     Cash    Common Stock    Land    No Entry    Paid-in Capital in Excess of Par—Common Stock    Paid-in Capital in Excess of Par—Preferred Stock    Preferred Stock    Retained Earnings	enter a debit amount	enter a credit amount
select an account title     Cash    Common Stock    Land    No Entry    Paid-in Capital in Excess of Par—Common Stock    Paid-in Capital in Excess of Par—Preferred Stock    Preferred Stock    Retained Earnings	enter a debit amount	enter a credit amount

(b) Indicate the effect the transaction has on cash. select an effect

IncreaseDecreaseNo Effect

(c) Indicate how the transaction is reported on the statement of cash flows.

Swifty Inc. Statement of Cash Flows (Partial) choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020
select an opening section name Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in CashNoncash Investing and Financing Activities
select an item     Preferred Stock    Purchase of Land    Purchase of Land Through Issuance of Common Stock    Issuance of Common Stock    Paid-in Capital in Excess of Par-Preferred Stock		$enter a dollar amount

Answer 1

1.

A - Journal Entry Will be

Land A/c dr 35500

Common Stock A/c 12000

Paid in Capital Excess of PAR 23500

Common stock Value = 1200 x 10

Paid in capital excess of PAR = 35500 - 12000 = 23500

B

NO Effect

There is no effect in cash with this transaction. Its transfer of fixed asset

C

fOR THE YEAR ENDED 31 DECEMBER 2020

This transaction will not effect cash so it will not include in cash flow statement

Normally the cash flow statement starting with cash flow from operating activities