Final answer:
The increase in treasury stock on Marian Company's balance sheet indicates a cash outflow of $200,000, which should be reported in the financing section of the statement of cash flows.
Step-by-step explanation:
If Marian Company's balance sheet shows that the balance in "treasury stock" increased by $200,000, and no additional information is provided, the entry for preparing Marian's statement of cash flows would reflect this as a financing activity. Specifically, the increase in treasury stock suggests that the company bought back its own shares. Since purchasing treasury stock is an outflow of cash through a financing activity, you would report the $200,000 as a cash outflow in the financing section of the statement of cash flows.
If the balance in "treasury stock" increased by $200,000, it would be reported as a financing activity in the statement of cash flows. Specifically, it would be reported as an increase in cash flow from financing activities.
Treasury stock is the stock that a company has repurchased from its shareholders. The increase in treasury stock means that the company bought back its own stock, which is considered a financing activity because it involves the use of cash to repurchase the stock.
Therefore, in the statement of cash flows, the increase in treasury stock would be reported as a decrease in cash flow from financing activities.