Research Memo

Lanyard Company is preparing its 2016 financial statements.During 2016, the company purchased a building from Great Neck Corporation for $100,000, paid $20,000 as a down payment, and signed an $80,000 mortgage with First Bank.Lanyard's president, Tom Holly, is concerned about how to report this transaction on the company's statement of cash flows and has asked you to research the FASB's Accounting Standards Codification (ASC).

a.write a short memo to the president that summarizes how to report this transaction on the 2016 statement of cash flows.

b.How would your answer be different if when Lanyard purchased the building from Great Neck Corporation for $100,000, paid a $20,000 down payment and signed an $80,000 mortgage with Great Neck Corporation instead of First Bank.

Clearly separate your answer to parts a and b when writing your memo.

Your grade will be based on the following criteria:

1.Identification of key issues

2.Inclusion of appropriate references and paragraph numbers from the FASB Codification.

3.Justification for and accuracy of your solution

4.Clarity and succinctness with which you communicate.The memos are limited to a single page and generally no longer than a few paragraphs.