Howard Co. uses the direct method to prepare its operating activities section of the statement of cash flows. Indicate how each event affects net income and the three types of activities on the statement of cash flows. In the net income column, use the letter "I" to indicate increase, the letter "D" to indicate decrease, and the letters "NA" to indicate that the income statement is not affected. In the three cash flow columns, use the letter "I" to indicate cash inflow, the letter "D" to indicate cash outflow, and the letters "NA" to indicate that the cash flow statement is not affected.Howard Co. issued 20,000 shares of common stock for $300,000 cash.
What will be an ideal response?
(NA) (NA) (NA) (I)
Issuing common stock for cash does not affect net income. The cash inflow is reported in the financing activities section of the statement of cash flows.
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