Question

The Omega started the year with $650,000 in the common stock account and $1,318,407 in the additional paid-in surplus account. The end-of-year balance sheet showed $720,000 and $1,299,310 in the same two accounts, respectively. What is the cash flow to stockholders if the firm paid $68,500 in dividends

Answer 1

$17,597

Step-by-step explanation:

Calculation to determine the cash flow to stockholders

Using this formula

Cash flow to stockholders = Dividends paid - Common stock issued

Let plug in the formula

Cash flow to stockholders= Dividends 68,500 - (1299,310+ 720,000)- (1318407+ 650000)

Cash flow to stockholders= Dividends 68,500 - (2,019,310-1,968,407)

Cash flow to stockholders= 68,500-50,903

Cash flow to stockholders= $17,597

Therefore the cash flow to stockholders if the firm paid $68,500 in dividends is $17,597