Question
A firm raises Rs.10,00,000 by issuing common equity.
Which of the following financial statements will reflect the transactions?Solution
The Rs.10,00,000-capital raised will appear in cash flow statements as a cash flow from financing activity. It will also appear as a contributed capital in owners’ equity. Both assets (cash) and equity (liabilities side of the balance sheet) increase in the balance sheet. The income statement is unaffected by these transactions
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