The following selected account balances are available from the records of Lewis town Company:

Other information available for 2014 is as follows:
a. Lewis town reported net income of $285,000 for the year.
b. It declared and distributed a stock dividend of $50,000 during the year.
c. It declared cash dividends at the end of each quarter and paid them within the next 30 days of the following quarter.

Required
1. With the use of T accounts, determine the amount of cash dividends paid during the year for presentation in the Financing Activities section of the statement of cash flows.
2. Should the stock dividend described in part (b) appear on a statement of cash flows? Explain your answer.

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December 31 2014 2013 Dividends payable Retained earnings $ 30,000 $ 20,000 375,000 250,000