8. Impact of Cash and Stock Dividends LO1, 3 The account balances for the noncash current assets and current liabilities of Abraham Music Company are as follows: December 31 2011 2012 Dividends payable $ 50,000 $ 40,000 Retained earnings 545,000 375,000 Other information for 2011: a. Abraham reported $375,000 in net income for 2011. b. The company declared and distributed a stock dividend of $85,000 during the year. C. The company declared cash dividends at the end of each quarter and paid them within the first 30 days of the next quarter. 10 Required 500C25W A. Determine the amount of cash dividends paid during the year for presentation in the financing activities section of the statement of cash flows. B. Should the stock dividend appear on a statement of cash flows? Explain your answer. Stock dividends Dividends declared Retained Earnings 85,000 Beg. balance Net income 545,000 375,000 Ending balance Dividends paid Dividends Payable Beg. balance Dividends declared 50,000 Ending balance Dividends paid to be reported in the financing activities section of the statement of cash flows The stock dividend should appear in either a separate schedule or foot