Accounting: Cash Dividend and Retained Earnings

What is the net cash flows provided by operating activities in the given cash flow statement?

What is the depreciation expense during 2022 as per the income statement?

What is the net increase in cash during the year ended December 31, 2022?

What is the formula for Cash Flow-to-Debt Ratio?

What is the free cash flow (FCF) of the company?

What is the cash return on assets ratio of the company?

What is the total liabilities of the company?

What is the average total assets of the company?

What is the net income of the company for the year ended December 31, 2022?

What is the cash at the end of period?

Cash Flow Statement

Consists of 3 sections: Operating activities, Investing activities, and Financing activities

Operating Activities

Includes income statement items:
- Revenues and gains
- Expenses and losses
- Depreciation expense
- Gain/loss on sale of fixed assets
Current assets:
- Accounts receivable
- Inventory
- Prepaid expenses
Current liabilities:
- Accounts payable
- Expense payable
- Bond interest payable

Investing Activities

Includes non-current assets:
- Land
- Equipment
- Buildings
- Furniture
- Machines
- Cars
Cash flow effects:
- Purchase of assets: cash decrease
- Sale of assets: cash increase

Financing Activities

Includes non-current liabilities:
- Bonds/long-term loans
Equity:
- Stocks
- Retained earnings
Cash flow effects:
- Issuance of bonds/stocks: cash increase
- Retirement of bonds/stocks: cash decrease
- Payment of cash dividends: cash decrease

Cash Flow Ratios

Cash Flow-to-Debt Ratio: Operating Cash Flow / Total liabilities
Free Cash Flow (FCF): Operating Cash Flow + Interest Expense - Capital Expenditure
Cash Return on Assets Ratio: Operating Cash Flow / Average Total Assets

This quiz covers the effect of cash dividend declaration and payment on retained earnings and common stock. It involves understanding the accounting principles and journal entries for dividend payments.