Which one of the statement describes impact of transaction

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Problem 1: InvestorCo buys some shares of InvesteeCo by paying $100 in cash to InvesteeCo. If InvestorCo does NOT account for these shares as trading securities, which one of the following statement describes the impact of this transaction on the cash-flow statements of InvestorCo and InvesteeCo?

a. InvestorCo will show a financing cash outflow of $100, and InvesteeCo will show a financing cash inflow of $100.

b. InvestorCo will show a financing cash outflow of $100, and InvesteeCo will book an investing cash inflow of $100.

c. InvestorCo will show an investing cash outflow of $100, and InvesteeCo will show a financing cash inflow of $100.

d. InvestorCo will show an investing cash outflow of $100, and InvesteeCo will book an investing cash inflow of $100.

e. None of the above.

Reference no: EM132965246

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