The following selected account balances relate to the shareholders' equity accounts of Corp. at year end:
__________________________________________________2018 2017
Preferred shares, 3,250 shares in 2018; 2,750 in 2017............$325,000.................$275,000
Common shares, 55,000 shares in 2018; 40,000 in 2017..........555,000...................400,000
Retained earnings......................................................................500,000...................300,000
Cash dividends declared (preferred shares)................................16,250.....................13,750
Dividends payable.........................................................................4,062.......................3,438
Additional information:
1. During the year, 500 preferred shares were issued. No preferred shares were repurchased.
2. During the year, 25,000 common shares were issued after 10,000 common shares were repurchased at $11 per share.
Instructions
(a) Determine the amounts of any cash receipts or payments related to the shareholders' equity accounts in 2018.
(b) Indicate where each of the cash receipts or payments identified in part (a) would be classified on the statement of cash flows or accompanying notes.
(c) Would you expect a growing company like Valerio to be generating or using cash for its financing activities? Explain.