Question

Land acquired from the issuance of common stock is reported

A) as a financing activity.
B) as an investing activity.
C) as an operating activity.
D) in a separate schedule at the bottom of the statement of cash flows.

Answer 1

Land acquired from the issuance of common stock is reported as an investing activity on the statement of cash flows.

Land acquired from the issuance of common stock is reported as an investing activity on the statement of cash flows.

When a company issues common stock, it receives cash in exchange for ownership shares in the company. This cash inflow is considered an investing activity because it represents an investment of financial capital into the company. The acquisition of land with the cash from the issuance of stock would also be classified as an investing activity since it involves the purchase of a long-term asset.