Question

Use the following information:

Answer 1

Answer:

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

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