Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
|
|
2014 |
2013 |
Increase/decrease |
|
Common stock |
$ 30,000 |
$ 2,000 |
$ 28,000 |
|
Retained earnings |
$ 113,000 |
$ 74,000 |
$ 39,000 |
|
Treasury stock |
$ (8,000) |
$ (5,000) |
$ (3,000) |
|
Total equity |
$ 135,000 |
$ 71,000 |
$ 64,000 |
Note: Net income for the year was $49,000
Dividends of $10,000 will be shown as a positive cash flow in the financing section of the statement of cash flow.
· True
· False
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