A Company Acquired Some Land (Independently Appraised at $12,000)and Paid

question 6

Multiple Choice

A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares of its common shares (par $10 per share; no market price was quoted) .How should this be reported on the statement of cash flows?

• A)Report $12,000 as inflow and outflow of cash.
• B)Report $12,000 as an inflow of cash.
• C)Should not be reported on the statement of cash flows.
• D)Report on a schedule of significant noncash transactions if it is material.

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Definitions:

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Reference Price

A price point that consumers use as a basis for comparison in judging the actual price of a product or service.