Allen Moving Company Uses the Indirect Method to Prepare Its

question 127

True/False

Allen Moving Company uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet:
$\begin{array}{c}\text { Allen Company}\\\text { Comparative Balance Sheet}\\\text { December 31,2017 and 2016}\\\begin{array}{|l|r|r|r|}\hline&2017 & 2016 & \text { Increase/(Decrease) }\\\hline \text { Common Stock } & \$ 34,000 & \$ 10,000 & \$ 24,000 \\\hline \text { Retained Earnings } & 115,000 & 90,000 & 25,000 \\\hline \text { Treasury Stock } & \underline{13,000} & \underline{(8,000} & \underline{(5,000} \\\hline \text { Total Stockholders' Equity } & 136,000 & 92,000 & 44,000\\\hline \end{array}\end{array}$ If the net income for the year was $67,000,the company must have declared $42,000 as dividends during the year.