Question

The balance in the Treasury Stock account has increased. This represents a cash? _____ and is properly categorized in the? _______ activities section of the Statement of Cash Flows.

A.

?outflow, financing

B.

?inflow, financing

C.

?inflow, investing

D.

?outflow, investing

TLR Productions issued 40shares of $ 17$par value stock to its accountant in full payment for her $ 900 fee for assisting in setting up the new company. The entry to record the issuance of the stock would include?a:

A.

debit to Paid?in Capital in Excess of Par?Common for $ 220

B.

credit to Common Stock for $900.

C.

credit to Common Stock for $680.

D.

debit to Common Stock for $680.

Answer 1

The balance in the Treasury stock account has increased This represents a can out flow and is properly categorised in the financing activities section of the statement of cash flow Answer is option A since treasury stock balance increase it implies that treasury stock were purchased and cash was given against the purchase so this is a cash out flow Activities pertaining long term debts and equity are financing activities so the answer is A TLR production issued 40 shares of $ 17 at par value stock to its accountant in full payment for her $ 900 fee for assisting in setting UP the new company. The entry to record the issuance of the stock would in clued common stock are recorded at par so the value of common stock will (40 times $ 17) $ 680 option C is the answer as common stock is credit by $ 680 & accountant fees is bited by $900 and difference will be recorded as paid in capital in excess to pay