A Company Purchases Land Using Its Common Stock

question 119

Multiple Choice

A company purchases land using its common stock. Where would this transaction appear when the company prepares the statement of cash flows?

• A) The purchase of land would be presented in the financing activities section as a cash payment.
• B) The purchase of land would be presented in the investing activities section as a cash payment under both methods.
• C) The purchase of land would be presented in the non-cash investing and financing activities section.
• D) The purchase of land would be presented in the operating activities section as a reduction in net income.

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Definitions:

Double-Loop Learning

A learning concept where organizations question and modify their underlying beliefs and assumptions, in addition to their usual practices, for more profound organizational change.

Single-Loop Learning

A teaching method where learners focus on solving specific problems without questioning underlying assumptions or modifying overall objectives.

Current Assumptions

Current assumptions are the premises or conditions that are believed to be true at the present moment and are used as a basis for planning or decision-making.

Freezing Stage

A phase in the change management process where old behaviors are stopped or stabilized to prepare for new changes.