The increase in preferred, common and APIC represents shares issued. The total of 175K would be a financing inflow.
In summary, you have a net increase in equity of 10.
+135 net income
+175 shares issued
- 300 dividends paid
= 10 net increase
I am given a comparative balance sheet to create the cash flow. I understand the operating and investing activities and am just having a hard time with the financing. I have the changes with bonds payable notes payable on there, but have a few questions on what to put under the stockholder's equity section. This is what I'm given:
'08 '09
Stockholder's Equity
Preferred Stock 30,000 100,000
Common Stock 75,000 140,000
Capital in excess of par 110,000 150,000
retained earnings 415,000 250,000
Total S/E 630,000 640,000
I know that to find dividends, I use my NIAT, ending and beginning retained earnings (NIAT = (135000) and got 30,000 for my dividends. I guess where I'm confused is the preferred and common stock and the capital in excess of par.
