Question

The accountant for Mandarin 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 $ 1,029,000 Net income for the year 335,000 Cash dividends declared for the year 63,000 Retained earnings balance at the end of the year 1,637,000 Cash dividends payable at the beginning of the year 14,200 Cash dividends payable at the end of the year 17,300 What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows

Answer 1

Answer:

$59,900

Explanation:

The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.

The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.  

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

The movement in the dividend payable account may be expressed mathematically as

Opening balance + Dividend declared - Dividend paid = Closing balance

$14,200 + $63,000 - Dividend paid = $17,300

Dividend paid

= $14,200 + $63,000 - $17,300

= $59,900

Answer 2

Answer:

$59,900

Explanation:

Base on the scenario been described in the question, we can use the following method to solve the given problem

The movement in the dividend payable account is given as

Opening balance + Dividend declared - Dividend paid = Closing balance

Substituting the values we have

$14,200 + $63,000 - Dividend paid = $17,300

Making dividend paid the subject of formula we have

Dividend = $14,200 + $63,000 - $17,300

Dividend paid = $59,900

As the answer