Question 7

The beginning balance in Retained Earnings is $20,000 and the ending balance is $60,000. Net Income is $70,000. Which of the following will be found in the Statement of Cash Flows prepared using the Indirect Method?

Change in Retained Earnings of $40,000 in Financing Activities section

Net income of $70,000 in Operating Activities section;

Payment of dividends of $30,000 in Financing Activities section

Change in Retained Earnings of $40,000 in Operating Activities section

Net income of $70,000 in Operating Activities section;

Payment of dividends of $30,000 in Operating Activities section