The following account balances relate to the stockholders€™ equity accounts of Kerbs Corp. at year-end.

A small stock dividend was declared and issued in 2020. The result of the stock dividend was to decrease retained earnings by $10,500 and increase common stock by $10,500. Cash dividends were $15,000 in both 2020 and 2019. The common stock has no par or stated value.

Instructions
a. What was the amount of net income reported by Kerbs Corp. in 2020?
b. Determine the amounts of any cash inflows or outflows related to the common stock and dividend accounts in 2020.
c. Indicate where each of the cash inflows or outflows identified in (b) would be classified on the statement of cash flows.

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2020 2019 Common stock, 10,500 and 10,000 shares, respectively, for 2020 and 2019 Preferred stock, 5,000 shares Retained earnings $170,000 125,000 $140,000 125,000 300,000 250,000