Discuss the common stock investment in bert bargain house

Reference no: EM131522264

Question: Ernie's Electronics had the following transactions with Bert's Bargain House:

1. Ernie sold Bert land, originally purchased for $180,000, at a sales price of $195,000, resulting in a gain on sale of land of $15,000.

2. Ernie borrowed $100,000 from Bert, signing a three-year note payable.

3. Ernie purchased $1 million in common stock in Bert's Bargain House through a private placement.

4. Ernie received a dividend of $40,000 from the common stock investment in Bert's Bargain House.

Required: Analyze each of the four transactions from the perspective of Ernie's Electronics. Indicate in which section of the statement of cash flows each of these items would be reported for Ernie's Electronics: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.

Reference no: EM131522264

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