N21 1 The following account balances were drawn from the fin

N21 1 The following account balances were drawn from the financial records of Crystal Company (CC) as 2 of January 1, 2013. Assets, $11,000; Liabilities, $3,400; Common Stock, $5,800; and Retained 3 Earnings, $1,800. CC has agreed to pay the creditors $340 of interest per year. Further, CC agrees 4 that for the 2013 fiscal year any annual earnings remaining after the interest charges will be paid 5 out as dividends to the owners. (Leave no cells blank - be certain to enter \"O\" wherever required.) 7 Required: 8 a. Assuming CC earns a profit of $780 (before recognition of interest expense) during 2013 9determine the amount of interest and dividends paid 10 Amount of interest 12 Dividends paid 13 14 b. Assuming CC earns a profit of $410 (before recognition of interest expense) during 2013 15 determine the amount of interest and dividends paid 17 Amount of interest 18 Dividends paid 19 20 c. Assuming CC earns a profit of $100 (before recognition of interest expense) during 201:3 21 determine the amount of interest and dividends paid 23 Amount of interest 24 Dividends paid 25

Solution

A) calculation of interest & dividend amount .

I) Amount of Interest =. $ 340

II) Amount of dividend =. $340

B) CALCULATION OF INTERESTED & DIVIDEND AMOUNT.

I) INTERESTED AMOUNT. =. $ 340

II) DIVIDEND AMOUNT. =. $ 340

C) CALCULATION OF INTEREST & DIVIDEND AMOUNT

I) INTERESTED AMOUNT =. $100

II) DIVIDEND AMOUNT. =. $ 0