The following account balances relate to the equity accounts of Gore Co. at year-end. A small share

Question:

The following account balances relate to the equity accounts of Gore Co. at year-end.

A small share dividend was declared and issued in 2011. The market value of the shares was $10,500. Cash dividends were $15,000 in both 2011 and 2010. The ordinary shares have no par or stated value.

Instructions
(a) What was the amount of net income reported by Gore Co. in 2011?
(b) Determine the amounts of any cash inflows or outflows related to the ordinary shares and dividend accounts in 2011.
(c) Indicate where each of the cash inflows or outflows identifies in (b) would be classified on the statement of cashflows.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...