Marla's Homemade Cookies Has Net Income of $1,280

question 160

Multiple Choice

Marla's Homemade Cookies has net income of $1,280. During the year, the company sold $50 worth of common stock and paid dividends of $40. What is the amount of the cash flow to
Stockholders?

• A) -$90
• B) -$10
• C) $10
• D) $40
• E) $90

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Definitions:

GAAP

Generally Accepted Accounting Principles, a common set of accounting principles, standards, and procedures that companies in the U.S. use to compile their financial statements.

Legal Capital

The portion of a company's equity that cannot legally be distributed to the shareholders as dividends, typically the par value of issued shares.

Corporate Creditors

Individuals or institutions owed money by a corporation, typically as a result of lending money or providing goods and services on credit.