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BK Enterprises neither sold nor repurchased any shares of stock during the year. The firm had annual sales of $7,202, depreciation of $1,196, cost of goods sold of $4,509, interest expense of $318, taxes of $248, beginning-of-year shareholders' equity of $4,808, and end-of-year shareholders' equity of $4,922. What is the amount of dividends paid during the year

Respuesta :

letmeanswer

$817 is the amount of dividends paid during the year.

Explanation:

Sales                                            7202

Less: Cost of goods sold            (4509)

Gross profit                                      $2693

Less: depreciation                                (1196)

Earnings before interest and taxes $1497

Less: interest expense                        (318)

Earnings before taxes                      $1179

Less: taxes                                     ($248)

Net income                                        $931

Calculation of equity at the year end is as follows:

End of the year equity = Beginning of the year equity + Net income - Dividends

Dividends = (4808 plus 931 minus 4922)

After calculating the above linear equation, we get, which is equal to

=$817.

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