Which of the Following Transactions Would Be Shown in the Noncash

question 96

Multiple Choice

Which of the following transactions would be shown in the noncash investing and financing activities section of the statement of cash flows?

• A) Sold equipment with book value of $4,000 in exchange for $1,000 cash and a $3,000 note
• B) Borrowed $22,000 cash on a note payable
• C) Issued 10,000 shares of stock at $5 per share
• D) Purchased a building in exchange for 10,000 shares of common stock

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Definitions:

Local Retailer

A business that sells products directly to consumers in a specific geographical area.

Cost of Goods Sold

The costs directly associated with manufacturing the products a company sells, such as materials and labor expenses.

Contribution Margin

The amount of revenue from sales that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change with the level of production or sales activity, such as rent and salaries.