Allen Moving Company uses the indirect method to prepare its statement of cash flows
Refer to the following portion of the comparative balance sheet:
Allen Company
Comparative Balance Sheet
December 31, 2017 and 2016
2017 2016 Increase/(Decrease)
Common Stock $34,000 $10,000 $24,000
Retained Earnings 115,000 90,000 25,000
Treasury Stock (13,000 ) (8,000 ) (5,000 )
Total Stockholders' Equity 136,000 92,000 44,000
If the net income for the year was $67,000, the company must have declared $42,000 as dividends during the year.
Indicate whether the statement is true or false
TRUE .Retained Earnings, 12/31/16 $90,000
Add: Net Income for the year 67,000
$157,000
Less: Retained Earnings for 12/13/17 115,000
Dividends Declared $42,000
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