Question

"If common stock was issued to acquire an $8,000 machine, how would the transaction appear on the statement of cash flows?" It would not appear on the statement of cash flows but rather on a schedule of noncash investing and financing activities. "It would be a negative $8,000 in the financing section and a positive $8,000 in the investing section." It would depend on whether you are using the direct or the indirect method. "It would be a positive $8,000 in the financing section and a negative $8,000 in the investing section."

Answer 1

Answer: It would not appear on the statement of cash flows but rather on a schedule of noncash investing and financing activities.

Step-by-step explanation:

The Statement of Cashflows only contains transactions that spent or brought in cash. It therefore only deals with cash transactions. This is a noncash investing and financing activity and so it will not be recorded in the Cashflow statement.

The way to record this transaction would be to either record it on a schedule of noncash investing and financing activities or it can be included as a footnote at the bottom of the Cashflow statement.