Asked by Ke'Darius Thornton on Apr 26, 2024
Verified
Which of the following transactions is not reported in the statement of cash flows as a cash flow from investing activities?
A) Selling a depreciable asset for cash at a loss.
B) Purchasing a patent using cash.
C) Purchasing land in exchange for common stock.
D) Purchasing shares of common stock of another company using cash.
Depreciable Asset
An asset subject to depreciation, representing the decline in value over time due to use, wear and tear, or obsolescence.
Investing Activities
Financial activities related to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.
- Dissect the monetary transactions emanating from investing activities.
Verified Answer
SD
Shaina Dela CernaApr 28, 2024
Final Answer :
C
Explanation :
Purchasing land in exchange for common stock is reported in the statement of cash flows as a noncash investing and financing activity, since it involves the exchange of a noncash asset (the common stock) for a new asset (the land). Selling a depreciable asset for cash at a loss, purchasing a patent using cash, and purchasing shares of common stock of another company using cash are all reported in the statement of cash flows as cash flows from investing activities.
Learning Objectives
- Dissect the monetary transactions emanating from investing activities.