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

question 46

Essay

While preparing a statement of cash flow, you encountered the following transaction: February 1, 20X1: 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:

Ties

Articles of clothing, typically narrow strips of fabric worn around the neck under the collar, primarily by men for decorative purposes.

Shirts

Pieces of clothing for the upper body, typically with sleeves and a front opening, made for both genders.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford given their income and the prices of goods and services.

Budget Constraint

A limiting factor that individuals or organizations face when deciding how to allocate available resources to meet their needs and desires.