Exercise 11-18 Impact of Transactions Involving Treasury Stock on Statement of C

Question

Exercise 11-18 Impact of Transactions Involving Treasury Stock on Statement of Cash Flows

Exercise 11-18 Impact of Transactions Involving Treasury Stock on Statement of Cash Flows From the following list, identify each item as operating (o), investing (I), financing (F), or not separately reported on the statement of cash flows (N). _______________ Repurchase of common stock as treasury stock. _________ Reissuance of common stock (held as treasury stock) _________________ Retirement of treasury stock

Explanation / Answer

Repurchase of common stock as treasury stock - Financing (F) as there is a movement of cash so it is a financial transaction.

Reissuance of common stock (held as treasury stock) - Financing (F) as there is a movement of cash so it is a financial transaction.

Retirement of treasury stock - Not seperatly reported on the statement of cash flows (N). Although the retirement of treasury stock is a financial transaction but still there is no movement of cash. Due to the effect, it will not come under the financial head of the statement of cash flows. Howeever, the retirement of treasury stock will be reported in a supplementry schedule which is related to the statement of cash flows.

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