Final answer:
The amount of dividends declared and paid by a firm during a year can be found on the statement of cash flows and potentially on the balance sheet. Dividends paid appear in the financing activities section of the cash flow statement, while dividends declared may be indicated on the balance sheet if there is a dividends payable liability.
Step-by-step explanation:
Information to determine the amount of dividends declared and the amount of dividends paid during the year is found on the company's statement of cash flows and potentially on the balance sheet. The statement of cash flows provides a detailed accounting of a company's cash inflows and outflows, with dividends paid reported in the financing section. Meanwhile, the balance sheet might indicate the amount of dividends declared during the period if any dividends payable are reflected as a liability on the date the balance sheet is issued.
Decisions about when a firm will issue stock, pay dividends, or re-invest profits are typically made by the company's board of directors, especially in publicly-traded companies. Private companies may handle these decisions differently, often influenced by a smaller group of investors or company owners.