Reporting Stockholders' Equity Items on Statement of Cash FlowsOn the basis of the following stockholders' equity accounts, indicate the items, exclusive of net income, to be reported on the statement of cash flows. There were no unpaid dividendsat either the beginning or the end of the year.ACCOUNT Common Stock, $40 parACCOUNT NO.BalanceDateItemDebitCreditDebitCreditJan.1Balance, 120,000 shares4,800,000Apr.30,000 shares issued for cash1,200,0006,000,000June 304,400-share stock dividend176,0006,176,000ACCOUNT Paid-In Capital in Excess of Par-Common StockACCOUNT NO.BalanceDateItemDebitCreditDebitCreditJan.Balance360,000Apr.30,000 shares issued for cash720,0001,080,000June30Stock dividend114,4001,194,4002.1.2. Jan.1Balance360,000Apr.30,000 shares issued for cash720,0001,080,000June30Stock dividend114,4001,194,400ACCOUNT Retained EarningsACCOUNT NO.BalanceDateItemDebitCreditDebitCreditJan.1Balance2,000,000June30Stock dividend290,4001,709,600Dec.30Cash dividend463,2001,246,400Dec.31Net income1,440,0002,686,400If an amount is not reported on the statement of cash flows, enter in "0" in the Amount column.ItemSection of Statement of Cash FlowsAdded or DeductedAmountSale of common stockCash dividend$4Stock dividend%24%24%242.

Cash flow statement provided information about the cash inflows and cash outflows of the company. Cash flow statement consists of three activities: Operating activities, Investing activities and Financing activities. Non cash activities are not shown on the cash flow statement. Sale of common stock is a cash inflow and is added in the financing activities section of statement of cash flows. Sale of common stock = Common stock + Paid-in capital in excess of par-Common stock Sale of common stock = $1,200,000 + $720,000 Sale of common stock = $1,920,000 Cash dividend is a cash outflow and is deducted in the financing activities section of statement of cash flows. Cash dividends = $463,200. Stock dividend does not involve any cash flow, hence not shown in the cash flow statement.

Business

Accounting

Jan. 1 Balance 360,000 Apr. 2. 30,000 shares issued for cash 720,000 1,080,000 June 30 Stock dividend 114,400 1,194,400 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 2,000,000 June 30 Stock dividend 290,400 1,709,600 Dec. 30 Cash dividend 463,200 1,246,400 Dec. 31 Net income 1,440,000 2,686,400 If an amount is not reported on the statement of cash flows, enter in "0" in the Amount column. Item Section of Statement of Cash Flows Added or Deducted Amount Sale of common stock %24 Cash dividend %24 Stock dividend %$4

Jan. 1 Balance 360,000 Apr. 2. 30,000 shares issued for cash 720,000 1,080,000 June 30 Stock dividend 114,400 1,194,400 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 2,000,000 June 30 Stock dividend 290,400 1,709,600 Dec. 30 Cash dividend 463,200 1,246,400 Dec. 31 Net income 1,440,000 2,686,400 If an amount is not reported on the statement of cash flows, enter in "0" in the Amount column. Item Section of Statement of Cash Flows Added or Deducted Amount Sale of common stock %24 Cash dividend %24 Stock dividend %$4

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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