Identifying and reporting non-cash transactionsDirtbikes, Inc. identified the following selected transactions that occurred during the year ended December 31, 2018: Issued 750 shares of $3 par common stock for cash of $17,000.Issued 5,100 shares of $3 par common stock for a building with a fair market value of $96,000.Purchased a new truck with a fair market value of $29,000. Financed it 100% with a long-term note.Retired short-term notes of $28,000 by issuing 1,900 shares of $3 par common stock.Paid long-term note of $10,500 to Bank of Tallahassee. Issued new long-term note of $23,000 to Bank of Trust.Identify any non-cash transactions that occurred during the year, and show how they would be reported in the non-cash investing and financing activities section of the statement of cash flows?

Question
Asked Jan 25, 2020
19 views

Identifying and reporting non-cash transactions

Dirtbikes, Inc. identified the following selected transactions that occurred during the year ended December 31, 2018:

  •  Issued 750 shares of $3 par common stock for cash of $17,000.
  • Issued 5,100 shares of $3 par common stock for a building with a fair market value of $96,000.
  • Purchased a new truck with a fair market value of $29,000. Financed it 100% with a long-term note.
  • Retired short-term notes of $28,000 by issuing 1,900 shares of $3 par common stock.
  • Paid long-term note of $10,500 to Bank of Tallahassee. Issued new long-term note of $23,000 to Bank of Trust.

Identify any non-cash transactions that occurred during the year, and show how they would be reported in the non-cash investing and financing activities section of the statement of cash flows?

check_circle

Expert Answer

Step 1

Non-Cash Transaction:

The transaction, which does not involve any cash dealings, is known as non-cash transactions. In these type transactions there will not be any inflow or outflow of cash. Simply put, the transaction, which does not have an impact on the inflow or outflow of cash, is called as non-cash transactions.

Step 2

Identify any non-cash transactions that occurred during the year, and show how they would be reported in t...

Accounting homework question answer, step 2, image 1
fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: What do earnings per share report, and how is it calculated?

A: Earnings per share is a financial ratio that indicates a company’s ability to earn revenue for its c...

question_answer

Q: What are the major advantages of notes to the financialstatements? What types of items are usually r...

A: Notes to financial statements can be the information which is left out from the balance sheet and in...

question_answer

Q: Which of the following is false? a.    GAAP and IFRS have the same absolute standard regarding the r...

A: International Financial Reporting Standard (IFRS): An international standard for identifying, analyz...

question_answer

Q: Market-share and market-size variances (continuation of 14-27). Emcee Inc. prepared the budget for 2...

A: Market share variance:Market share variance computes the deviation between the actual market share a...

question_answer

Q: A Type A lease agreement calls for annual lease payments of $26,269 over a six-year lease term, with...

A: Finance lease Sales type/Finance lease in parallel type of direct financing whereby the owner (lesso...

question_answer

Q: Suppose Yummy Treats Bakery issues common stock in exchange for a building. Yummy Treats Bakery shou...

A: The correct answer is Option (c)

question_answer

Q: Lenexa State Bank has followed the practice of capitalizingcertain marketing costs and amortizing th...

A: Accounting policy: Accounting policy is a set of rules, regulations, principles and procedures follo...

question_answer

Q: What does the statement of a retained earnings report?

A: Statement of retained earnings: This is a financial statement that shows the amount of net income re...

question_answer

Q: List three characteristics of a corporation.

A: Corporation A corporation is a form of business entity that is incorporated through the state charte...