Question

Use the following information:

Windswept, Inc. 2017
Income Statement
($ in millions)
Net sales $10,200
Cost of goods sold 7,800
Depreciation 355
Earnings before interest and taxes $2,045
Interest paid 94 Taxable income $1,951
Taxes 585
Net income $ 1,366
Windswept, Inc. 2016 and 2017
Balance Sheets ($ in millions)
2016 2017 2016 2017
Cash $340 $360 Accounts payable $1,820 $1,680
Accounts rec. 1,050 950 Long-term debt 1,040 1,500
Inventory 1,820 1,740 Common stock 3,300 3,110
Total $3,210 $3,050 Retained earnings 620 870
Net fixed assets3,570 4,110
Total assets $6,780 $7,160 Total liab & equity $6,780 $7,160
What amount should be included in the financing section of the 2010 statement of cash flows for dividends paid?

Answer 1

Windswept, Inc.

The amount that should be included in the financing section of the 2010 statement of cash flows for dividends paid is:

= $1,116

Step-by-step explanation:

a) Data and Calculations:

Income Statement

($ in millions)

Net sales $10,200

Cost of goods sold 7,800

Gross profit $2,400

Depreciation 355

Earnings before interest and taxes $2,045

Interest paid 94

Taxable income $1,951

Taxes 585

Net income $ 1,366

Windswept, Inc.

Balance Sheets ($ in millions)

2016 2017 2016 2017

Cash $340 $360 Accounts payable $1,820 $1,680

Accounts receivable 1,050 950 Long-term debt 1,040 1,500

Inventory 1,820 1,740 Common stock 3,300 3,110

Total $3,210 $3,050 Retained earnings 620 870

Net fixed assets 3,570 4,110

Total assets $6,780 $7,160 Total liab & equity $6,780 $7,160

Dividends paid:

Retained earnings, 2016 $620

Net income for 2017 1,366

Total $1,986

Retained earnings, 2017 (870)

Dividends paid = $1,116