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?

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

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