Determining Dividends Paid on Statement of Cash Flows

Clifford Company's comparative balance sheet included dividends payable of $80,000 at December 31, 2015, and $100,000 at December 31, 2016. Dividends declared by Clifford during 2016 amounted to $400,000.

Required:

1. Calculate the amount of dividends actually paid to stockholders during 2016.

$_______________

2. How will Clifford report the dividend payments on its 2016 statement of cash flows?

(A) financing activity

(B) investing activity

(C) operating activity