Determine the amount of cash dividends

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Reference no: EM132868931

Problem - Dividends on the Statement of Cash Flows - The following selected account balances are available from the records of Lewistown Company:

 

December 31

 

2016

2015

Dividend payable

$30,000

$20,000

Retained earnings

375,000

250,000

Other information available for 2016 is as follows:

a. Lewistown reported net income of $285,000 for the year.

b. It declared and distributed a stock dividend of $50,000 during the year.

c. It declared cash dividends at the end of each quarter and paid them within the next 30 days of the following quarter.

Required -

1. With the use of T accounts, determine the amount of cash dividends paid during the year for presentation in the Financing Activities section of the statement of cash flows.

2. Should the stock dividend described in part (b) appear on a statement of cash flows? Explain your answer.

Reference no: EM132868931

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