The 2014 statement of cash flows of Dickens Corporation shows $500,000 cash paid for dividends. If dividends in Hemingway's statement of retained earnings are reported at $550,000 then:

Question

Quizplus · Accepted Answer

The dividends paid by Dickens Corporation are reported on the statement of cash flows, while the dividends declared by Hemingway are reported on the statement of retained earnings. Therefore, if Hemingway reported $550,000 of dividends declared, but Dickens only paid out $500,000, it means that Dickens' dividends payable must have increased by $50,000. So, choice C is correct.

The 2014 Statement of Cash Flows of Dickens Corporation Shows