Question

Dec. 31 2013 balance sheet of Schism Inc., showed $152,000 in the common stock account and $2,770,000 in the additional paid in surplus account. The Dec. 31 2014, balance sheet showed $162,000 and $3,070,000 in the same two accounts, respectively. If the company paid out $157,000 in cash dividends during 2014, what was the cash flow to stockholders during 2014?

Answer 1

During 2014, the cash flow to stockholders was $153,000.

Step-by-step explanation:

To calculate the cash flow to stockholders during 2014, we need to subtract the increase in common stock and additional paid in surplus from the 2014 balance sheet from the amounts reported in the 2013 balance sheet.

The change in common stock is $162,000 - $152,000 = $10,000, and the change in additional paid in surplus is $3,070,000 - $2,770,000 = $300,000.

Therefore, the cash flow to stockholders during 2014 is $10,000 + $300,000 - $157,000 = $153,000.