Dividends of $100 000 were declared during the year,and the balances in the dividends payable account at the beginning and end of the year were $15 000 and $25 000 respectively.What amount would be reported as payment of dividends in the cash flows from the financing activities section of the statement of cash flows?

Question

Quizplus · Accepted Answer

To calculate the payment of dividends in the cash flows from the financing activities section, we need to use the formula:

Dividends paid = Dividends declared - Increase in dividends payable + Decrease in dividends payable

Substituting the given values:

Dividends paid = $100 000 - ($25 000 - $15 000) = $90 000

Therefore, the correct answer is A) $90 000.

Dividends of $100 000 Were Declared During the Year,and the Balances