Final answer:
Schneider Company's non-cash purchase of equipment by issuing shares should be reported outside the main sections of the cash flow statement. A firm's accounting profit is its sales revenue minus total expenses. For Babble, Inc., the share price would be determined by the present value of expected dividends divided by the number of shares.
Step-by-step explanation:
When the Schneider Company purchased equipment by issuing shares instead of using cash, it engaged in a non-cash financing activity. In its statement of cash flows, such transactions are not reported in the operating, investing, or financing sections because no cash is involved. These types of transactions are instead typically disclosed in either a separate schedule at the bottom of the cash flow statement or in the notes to the financial statements. Therefore, Schneider should disclose the purchase of equipment through stock issuance outside the main sections of the cash flow statement.
Regarding the self-check questions on a firm's accounting profit, for the firm with $1 million in sales revenue and expenses for labor, capital, and materials totaling $950,000, the accounting profit is calculated by subtracting total expenses from sales revenue. The accounting profit would be $1,000,000 (sales revenue) - $950,000 (total expenses) = $50,000.
In the case of Babble, Inc., an investor would calculate the present value of the expected dividends and divide it by the number of shares to determine what they would pay for a share of stock. However, without the discount rate for the present value calculations, a definitive price per share can't be provided. But if we assume a discount rate of 15%, we can calculate the present value of dividends for each year and then determine the share price based on the number of shares issued (200), which would provide an approximate price per share.