The following account balances relate to the stockholders' equity accounts of Hanshew Corp. at year-end.

A small stock 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 common stock has no par or stated value.

Instructions
(a) What was the amount of net income reported by Hanshew Corp. in 2011?
(b) Determine the amounts of any cash inflows or outflows related to the common stock and dividend accounts in 2011.
(c) Indicate where each of the cash inflows or outflows identified in (b) would be classified on the statement of cash flows.

Transcribed Image Text:

2011 2010 Common stock, 10,500 and 10,000 shares, respectively, for 2011 and 2010 Preferred stock, 5,000 shares Retained earnings $160,000 $140,000 125,000 260,000 125,000 300,000