Taylor Company Follows the Indirect Method to Prepare Its Statement $\quad$

question 102

Multiple Choice

Taylor Company follows the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Taylor Company
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Balance Sheet
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ December 31, 2014 and 2013
$\begin{array}{lrrc}\hline&2014&2013& \text { Increase/decrease } \\ \text { Common Stock } & \$ 30,000 & \$ 2,000 & \$ 28,000 \\\text { Retained Earnings} & 154,000 & 89,000 & 65,000 \\\text { Treasury Stock} & (8,000) & (5,000) & (3,000) \\\text {Total equity} & \$176,000& \$86,000 & \$90,000 \\\hline\end{array}$ Note: Net Income for the year was $89,000.
Based on the above information, calculate the dividends declared during the year 2014.

• A) $3,000
• B) $89,000
• C) $65,000
• D) $24,000

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Definitions:

Consolidation

The process in accounting and finance where the financial statements of a parent company and its subsidiaries are combined to form a single, comprehensive financial statement.

Proxy Contests

A situation where two or more parties vie to collect enough shareholder votes to win a corporate election, often related to changes in company management or strategy.

Revenue Enhancement

Revenue enhancement refers to strategies and actions taken by a company to increase the income it generates from its business activities.

Acquisitions

The process of a company purchasing the majority or all of another company's shares to gain control of that company.