Hale Inc. declared and paid cash dividends of $100,000 on common stock and $75,000 on preferred stock. How would these dividends be presented in Hale's statement of cash flows?

Question

Quizplus · Accepted Answer

Dividends paid, whether on common or preferred stock, are considered financing activities. Therefore, the total $175,000 in dividends would be shown as a reduction in cash flows from financing activities.

Hale Inc Declared and Paid Cash Dividends of $100,000 on Common