Determine the amount of interest and dividends paid

QUESTION :

The following account balances were drawn from the financial records of Crystal Company (CC) as of January 1, 2013. Assets, $14,000; liabilities, $4000.; common stock, $7000.; and retained earnings, $3000. CC has agreed to pay the creditors $400 of interest per year. Further, CC agrees that for the 2013 fiscal year any annual earnings remaining after the interest charges will be paid out as dividends to the owners.

Required:

Assuming CC earns a before interest expense recognition profit of $900 during 2013, determine the amount of interest and dividends paid

For access on solution towards this problem email : help@d2qud7ra4nbef7.cloudfront.net or chat with us on live.

Submit Assignment

Fill in the form below or give us a call and we'll contact you. We endeavour to answer all enquiries within 24-48 hours on business days.