Question

Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $258,000 Cash dividends declared for the year 68,750Proceeds from the sale of equipment 118,000Gain on the sale of equipment 6,750Cash dividends payable at the beginning of the year 30,250Cash dividends payable at the end of the year 37,500Net income for the year 151,250The amount of cash paid for dividends was:a. $61,500.b. $83,500.c. $68,750.d. $82,500.e. $67,750.

Answer 1

Answer:

a. $61,500

Explanation:

Calculation for the amount of cash paid for

dividends

Using this formula

Dividend amount=Cash dividends payable at the beginning of the year +Dividend declared during the period - Cash dividends payable at the end of the year

Let plug in the formula

Dividend amount =$30,250+$68,750-$37,500

Dividend amount =$61,500

Therefore the amount of cash paid for

dividends will be $61,500