Kelly Company, a small corporation, is preparing its 2016 nancial statements. The CFO is in the process of preparing the statement of cash flows for

Kelly Company, a small corporation, is preparing its 2016 financial statements. The CFO is in the process of preparing the statement of cash flows for presentation to the auditors, but has never prepared this statement in the past. There were three transactions during the year that she is not sure how to report and has asked your advice. The transactions are as follows

• At the end of 2016, the company purchased a building for $100,000, paid $20,000 as a down payment, and signed an $80,000 mortgage.
• In June the Company issued additional common stock to raise capital for the acquisition of a competitor.  The investor was issued 100,000 shares at a total price of $500,000. Of this amount $200,000 was paid at the time of issuance and $300,000 will be paid when the acquisition is completed. At the end of 2016 the acquisition is still pending.
• The Company committed to purchase $2,000,000 of inventory to be delivered over the next two years.  Payments of $200,000 per month began in November. As of year-end, two payments have been made. 

The CFO has requested your advice on the proper disclosure of these transactions on the statement of cash flows. 

1. Research the related U.S. GAAP using the FASB’s Accounting Standards Codifications and Prepare a research memo to the CFO that explain how to report these three transactions on the 2016 statement of cash flows. Cite your reference and applicable paragraph numbers (From FASB).