Question

Use the following information:

Net Sales $9,740
Cost of goods sold 7,910
Depreciation 480
Earnings before interest and taxes $1,350
Interest paid 110
Taxable income $1,240
Taxes 434
Net income $806
Windswept, Inc.
2016 and 2017
Balance Sheets ($ in millions)
2016 2017 2016 2017
Cash $260 $290 Accounts payable $1,490 $1,460
Accounts rec. 1,060 960 Long-term debt 1,130 1,330
Inventory 1,900 1,740 Common stock 3,400 3,340
Total $3,220 $2,990 Retained earnings 670 920
Net fixed assets 3,470 4,060
Total assets $6,690 $7,050 Total liab. & equity$6,690 $7,050
What were the total dividends paid for 2017?

Answer 1

Windswept, Inc.

The total dividends paid for 2017 is:

= $556.

Step-by-step explanation:

a) Data and Calculations:

Windswept, Inc.

Income Statement for the year ended December 31, 2017:

Net Sales $9,740

Cost of goods sold 7,910

Depreciation 480

Earnings before interest and taxes $1,350

Interest paid 110

Taxable income $1,240

Taxes 434

Net income $806

Windswept, Inc.

2016 and 2017 Balance Sheets ($ in millions)

2016 2017 2016 2017

Cash $260 $290 Accounts payable $1,490 $1,460

Accounts rec. 1,060 960 Long-term debt 1,130 1,330

Inventory 1,900 1,740 Common stock 3,400 3,340

Total $3,220 $2,990 Retained earnings 670 920

Net fixed assets 3,470 4,060

Total assets $6,690 $7,050 Total liab. & equity $6,690 $7,050

The total dividends paid for 2017:

Retained earnings, Dec. 31, 2016 $670

Net income for the year, 2017 806

Less Retained earnings, Dec. 31, 2017 920

Dividends paid $556