# Compute CFO (modified question)

change in retained earnings…+20 change in accounts receivable…+5 change in inventory…+3 change in accounts payable… -7 company RECEIVED A CASH DIVIDEND…5 <

retained earnings is part of stockholders equity. CFO = 35. look at previous posts.

pepp, in the previous posts, the company paid a cash dividend, and that cash dividend was added to RE to compute CFO. Now, in this question, the company received a cash dividend. How will this effect RE when computing CFO?

It does not.

ohh sorry, i didn’t see the difference in question. okay the answer is 20 - 7- 3- 5 + 25 = 30

change in retained earnings…+20 change in accounts receivable…+5 change in inventory…+3 change in accounts payable… -7 company RECEIVED A CASH DIVIDEND…5 <

The answer is 30, as pepp pointed out. And if this isn’t super easy for you, go back to drilling on some real problems in exam format instead of dikking around this website, with the exam so close. supersharpshooter - Dividends received are income (unless we’re talking equity method, but thats Level 2, so it is included in net income and a component of the change in RE.

SuperI is right in all respects

Beg Earning + Net Income - Dividends paid = Ending Earning therefore, N.I = Retained earnings + Dividends paid. I hope this helps.