Final answer:
The issuance of common shares in exchange for non-cash assets like land and equipment does not affect a cash flow statement since it doesn't involve cash transactions. It is recorded on the balance sheet.
Step-by-step explanation:
The issuance of common shares in exchange for land and equipment will not affect a cash flow statement. When a company issues stock in exchange for non-cash assets, this transaction is accounted for in the equity or shareholders' equity section of the balance sheet, but it does not impact the cash flow since no actual cash is involved. On a cash flow statement, only transactions that affect the company's cash or cash equivalents are recorded, which includes cash received or paid out as a result of operating, investing, and financing activities.
The benefit of issuing stock is that it allows the company to raise capital without incurring debt. It avoids interest payments that might be required with borrowing through loans or issuing bonds. However, issuing stock does dilute ownership and could lead to future dividend payments if the company chooses to distribute profits to shareholders.