Chapter 12, Problem 16Q

To determine

Non- cash transactions

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.

Some examples of significant non-cash transactions are stated below:

• Issue of common stock to retire long term debt.
• Purchase of machinery by issuing notes payable
• Issuance of common stock for purchase of land

To indicate: the reporting of transaction “Exchange of common stock for Land” on the statement of cash flows.