Answer:
a) The amount of net income reported by Kerbs Corp. in 2020 is $299,800
b) Dividend = $17,000 ( Cash outflow from financial activities)
Common stock = $8,000 ( Cash inflow from financial activities)
Explanation:
2020 2019
Common stock, 10,500 shares 10,000 shares
$157,100 $137,800
Preferred stock, 5,000 shares $92,400 $92,400
Retained earnings $299,800 $248,500
a) Total amount of net income reported by Kerbs Corp. in 2020
= Retained earnings by the beginning of the year + Net income - cash dividend - stock dividend
Calculation of net income = Closing retained earnings + dividends - openind retained earnings
= $299,800 + ($11,300 + $17000) - $248,500
= $79,600
= $248,500 + $79,600 - $11,300 - $17,000
= $299,800
b) Determine the amounts of any cash inflows or outflows related to the common stock and dividend accounts in 2020
Inflow to common stocks = opening common stock - closing common stock - stock dividend
= $157,100 - $137,800 - $11,300
= $8,000
Dividend = $17,000 ( Cash outflow due to dividend)
