Question

The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 3 Cash $626,640.00 $585,760.00 4 Accounts receivable (net) 226,900.00 208,390.00 5 Inventories 641,350.00 616,130.00 6 Investments 0.00 239,300.00 7 Land 328,730.00 0.00 8 Equipment 705,940.00 553,530.00 9 Accumulated depreciation-equipment (166,970.00) (148,000.00) 10 Total assets $2,362,590.00 $2,055,110.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable (merchandise creditors) $425,140.00 $404,540.00 13 Accrued expenses payable (operating expenses) 42,020.00 52,750.00 14 Dividends payable 23,580.00 19,500.00 15 Common stock, $4 par 154,000.00 100,000.00 16 Paid-in capital: Excess of issue price over par—common stock 416,600.00 279,400.00 17 Retained earnings 1,301,250.00 1,198,920.00 18 Total liabilities and stockholders’ equity $2,362,590.00 $2,055,110.00

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

A. The investments were sold for $279,880 cash.

B. Equipment and land were acquired for cash.

C. There were no disposals of equipment during the year.

D. The common stock was issued for cash.

E. There was a $198,010 credit to Retained Earnings for net income.

F. There was a $95,680 debit to Retained Earnings for cash dividends declared.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Answer 1

Dividend Paid = Dividend Payable, 20Y2 + Dividend declared - Dividend Payable, 20Y3
Dividend Paid = $19,500 + $95,680 - $23,580
Dividend Paid = $91,600