The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed $450,000 in the common stock account and $2.1 million in the additional paid-in surplus account. The 2015 balance sheet showed $490,000 and $2.4 million in the same two accounts, respectively.

The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed $450,000 in the common stock account and $2.1 million in the additional paid-in surplus account. The 2015 balance sheet showed $490,000 and $2.4 million in the same two accounts, respectively.

If the company paid out $400,000 in cash dividends during 2015, what was the cash flow to stockholders for the year? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

Cash flow to stockholders

$

 

Explanation:

Cash flow to stockholders = Dividends paid – Net new equity

Cash flow to stockholders = Dividends paid – [(Commonend + APISend) – (Commonbeg + APISbeg)]

Cash flow to stockholders = $400,000 – [($490,000 + 2,400,000) – ($450,000 + 2,100,000)]

Cash flow to stockholders = $60,000

Note, APIS is the additional paid-in surplus.