# CMA Study Group

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## need help

• #### 1.  need help

Posted 27 days ago

Dear all,
thanks to support me,
I want to know the explanation for adding (decrease in dividend payable by 5000) in RE equation  for that question below.

Bertram Company had a balance of \$100,000 in Retained Earnings at the beginning of the year and

\$125,000 at the end of the year. Net income for this time period was \$40,000. Bertram's Statement

of Financial Position indicated that Dividends Payable had decreased by \$5,000 throughout the year,

despite the fact that both cash dividends and a stock dividend were declared. The amount of the

stock dividend was \$8,000. When preparing its Statement of Cash Flows for the year, Bertram

should show Cash Paid for Dividends as

a. \$20,000.

b. \$15,000.

c. \$12,000.

d. \$5,000

Correct answer c. Bertram's Cash Paid for Dividends is \$12,000 as calculated below.

\$100,000 + \$40,000 - \$8,000 + \$5,000 – X = \$125,000

\$137,000 – X = \$125,000

X = \$12,000

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