The following account balances were drawn from the financial records of Crystal Company (CC) as of January 1, 2014. Assets, $12,000 (all in cash); Liabilities, $3,600; Common Stock, $6,200; and Retained Earnings, $2,200. CC has agreed to pay the creditors $360 of interest per year. Further, CC agrees that for the 2014 fiscal year any annual earnings remaining after the interest charges will be paid out as dividends to the owners.
a. Assuming CC earns a before interest expense recognition profit of $820 during 2014, determine the amount of interest and dividends paid.
amount of interest
dividens paid