Question

The accountant for Sysco Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $ 879,000 Net income for the year 260,000 Cash dividends declared for the year 48,000 Retained earnings balance at the end of the year 1,187,000 Cash dividends payable at the beginning of the year 11,200 Cash dividends payable at the end of the year 12,800 What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?

Answer 1

Sysco Company paid $49,600 in cash dividends during the fiscal year, taking into account the declared dividends and the change in dividends payable. This figure should be reported under financing activities in the statement of cash flows.

Step-by-step explanation:

To calculate the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows, we must consider not only the cash dividends declared for the year ($48,000) but also adjust for the change in cash dividends payable from the beginning to the end of the year.

Here is the calculation:

1. Start with the cash dividends declared for the year: $48,000.
2. Add the increase in cash dividends payable for the year (Cash dividends payable at the end of the year - Cash dividends payable at the beginning of the year): $12,800 - $11,200 = $1,600.
3. The total cash dividends paid during the year is the sum of the declared dividends plus the change in dividends payable: $48,000 + $1,600 = $49,600.

Therefore, Sysco Company paid $49,600 in cash dividends during the fiscal year, which is what should be reported under the financing activities in the statement of cash flows.

Answer 2

$46,400

Step-by-step explanation:

The cash dividends paid that should be reported in the financing section of the statement of cash flows

= Cash dividends payable at the beginning of the year + Cash dividends declared for the year - Cash dividends payable at the end of the year

= 11,200 + 48,000 - 12,800

= 46,400