The 2010 balance sheet of Maria%u2019s Tennis Shop, Inc., showed $460,000 in the

Question

The 2010 balance sheet of Maria%u2019s Tennis Shop, Inc., showed $460,000 in the common stock account and $3.2 million in the additional paid-in surplus account. The 2011 balance sheet showed $500,000 and $3.5 million in the same two accounts, respectively.

If the company paid out $410,000 in cash dividends during 2011, what was the cash flow to stockholders for the year? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

If the company paid out $410,000 in cash dividends during 2011, what was the cash flow to stockholders for the year? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

Explanation / Answer

Hi,

Please find the answer as follows:

Cash Flow to Stockholders = Dividends Paid - New Equity

Cash Flow to Stockholders = 410000 - [(500000 + 3500000) - (460000 + 3200000)] = $70000

Thanks.

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