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The statement of cash flows for Baldwin Company shows what happens in the Cash account during...

The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin repurchases some of its common stock:
Select: 1
It is a use of cash, and will be shown in the financing section as a subtraction.
It is a source of cash and will be shown in the financing section as an addition.
It is a use of cash, and will be shown in the investing section as a subtraction.
It is a source of cash, and will be shown in the investing section as an addition.

Solutions

Expert Solution

Repurchase of its common stock is not investing activities so option c and D is incorrect.

Since share was repurchase so cash is outflow for the company, so option B is also incorrect.

Correct option A

jeff jeffy answered 2 years ago
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