Situation Kelly Company, a small corporation, is preparing its 2019 financial statements. At the end of 2019,
Question:
Situation
Kelly Company, a small corporation, is preparing its 2019 financial statements. At the end of 2019, the company purchased a building for $100,000, paid $20,000 as a down payment, and signed an $80,000 mortgage.
Kelly’s president is concerned about how to report this transaction on the company’s statement of cash flows and has asked you to “look into this issue for me.”
Directions
Research the related U.S. GAAP using the FASB’s Accounting Standards Codification and prepare a short memo to the president that summarizes how to report this transaction on the 2019 statement of cash flows. Cite your reference and applicable paragraph numbers.
GAAPGenerally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
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You are expected to cite references to GAAP in their research of this issue While they might use var...View the full answer
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Related Book For 
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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