A Company Reported the Following Information An Analysis of Records Indicated That There Were No Cash

question 28

Multiple Choice

A company reported the following information: $\begin{array}{l}\begin{array} {ll} & \underline{ 2014 } & \underline{ 2013 } \\\text { Land } & \$ 350,000 &{ \$ 100,000 } \\\text { Common stock } &450,000 & 200,000\end{array}\end{array}$
An analysis of records indicated that there were no cash flow effects resulting from the changes in the two accounts presented above.How should the changes in these accounts be reported on a statement of cash flows?

• A)The company should report $250,000 for the sale of land as an investing activity and $250,000 for the issuance of stock as a financing activity.
• B)The company should report $250,000 as a noncash investing and financing activity for the acquisition of land by issuing common stock.
• C)The company should report the issuance of common stock to acquire land in the financing activity section with a net cash flow effect of zero.
• D)The company should report the acquisition of land by issuing common stock in the investing activity section with a net cash flow effect of zero

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Definitions:

Difference Threshold

The minimum difference in intensity or quantity required for a person to detect a change between two stimuli.

Separation Threshold

The minimum physical distance or difference that can be discerned between two stimuli.

Absolute Threshold

The smallest intensity of a stimulus that can be detected by the senses at least 50% of the time.

Auditory Convergence

The coordination and integration of sound signals from both ears in the brain, contributing to the localization and understanding of sound.