While Preparing a Statement of Cash Flows,you Encountered the Following

question 34

Essay

While preparing a statement of cash flows,you encountered the following transaction:
February 1,2011:
Battles Corporation acquired a small office building in exchange for 5,000 shares of its own common stock; par value $10 per share; market value $15 per share.
Should this transaction be shown on the statement of cash flows? Why or why not?

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, and, as a result, prices become stable.

Supply Curves

Graphical representations showing the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing to offer for sale.

Price Floors

A government- or authority-imposed minimum price that sellers must charge for a good or service, essentially preventing prices from falling below this set level.

Ceiling Prices

Maximum prices set by the government on certain goods and services to prevent excessive pricing during shortages or inflationary periods.