The 2017 balance sheet of kerber's tennis shop, inc., showed $650,000 in the common stock account and $3.98 million in the additional paid-in surplus account. the 2018 balance sheet showed $805,000 and $4.2 million in the same two accounts, respectively. if the company paid out $545,000 in cash dividends during 2018, what was the cash flow to stockholders for the year?

The cash flow to stockholders for the year is $1,70,000 .

We follow these steps to arrive at the

--- (1)

We have:

Next we find the net change to capital surplus.

Pluggin the calculated values in equation (1) we get,

Based on the information given the cash flow to stockholders for the year is $170,000.

Cash flow to stockholders

Cash flow to stockholders = $545,000 - [($805,000 + $4,200,000) - ($650,000 + $3,980,000)]

Cash flow to stockholders = $545,000 - ($5,005,000-$4,630,000)

Cash flow to stockholders = $545,000 - $375,000

Cash flow to stockholders = $170,000

Inconclusion  the cash flow to stockholders for the year is $170,000.

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