The following selected account balances relate to the shareholders' equity accounts of Mathur Corp. at year end:

Additional information:
1. The company reacquired and retired 2,000 common shares in 2012 for $40 per share. The average cost of the shares was $13.60 per share.
2. All cash dividends were declared and paid during the same year. There were no dividends payable at the end of 2011 or 2012.
3. During the year, 1,000 common shares were issued as a stock dividend. The fair value of the shares at the time of declaration was $40 per share.
4. Profit was $49,050 in 2012.
5. The company reported other comprehensive income of $5,000 in 2012 from the revaluation of land to fair value.
Instructions
(a) Determine the amounts of any cash inflows or outflows related to the shareholders' equity accounts in 2012.
(b) Indicate where each of the cash inflows or outflows identified in (a) would be classified on the statement of cash flows or accompanying notes.
(c) Would you expect a growing company to be generating or using cash for its financing activities? Explain.

Transcribed Image Text:

2012 $125,000 Preferred shares, 5,000 shares Common shares, 9,000 shares in 2012, 10,000 in 2011 Contributed capital-reacquired common shares Retained earnings Accumulated other comprehensive income Cash dividends-preferred Stock dividends-common 2011 $125,000 136,000 40,000 250,000 10,000 240,000 15,000 6,250 40,000 6,250