Question

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

a.the cash flows from investing activities section

b.a separate schedule

c.the cash flows from operating activities section

d.the cash flows from financing activities section

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

a.a separate schedule

b.the cash flows from investing activities section

c.the cash flows from operating activities section

d.the cash flows from financing activities section

Answer 1

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

b . a separate schedule

In the transaction not changes in Cash takes place.Nither of Cash Indlow nor Cash Outflow takes please in this transaction. So it will not come under Cash Flow Statement.

Therefore it will be entered in a separate schedule.

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

b.the cash flows from investing activities section.

Purchase long-term investments represents increase in Investment, so it will be reported under the cash flows from investing activities section.