While Preparing a Statement of Cash Flow, You Encountered the Following

question 84

Essay

While preparing a statement of cash flow, you encountered the following transaction:
February 1, 20A: Zorro Corporation acquired a small office building in exchange for 5,000 shares of its own common shares; par value $10 per share; market value $15 per share.
(a) Should this transaction be included in the calculations on the statement of cash flows or shown in the notes?
(b) Explain your answer.

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Definitions:

Conclusion Indicator

Words or phrases used in argumentation to signal that a conclusion is being drawn, such as "therefore" or "thus."

Thus

A term used to introduce a logical conclusion or result from the preceding argument or statement.

Argumentation

The process of constructing and presenting arguments, involving reasoning and evidence, to persuade or inform others in a discussion or debate.

Persuade

To induce someone to do or believe something through reasoning or argument.