IDENTIFYING FINANCIAL STATEMENT RELATIONS

Required

Determine the amount of each of the following items.

a. Dividends declared and paid during Year 1

b. Depreciation expense for Year 1 assuming that Watson Corporation neither sold nor retired depreciable assets during Year 1

c. Inventories at the end of Year 2

d. Interest expense on borrowing during Year 2, with an interest rate of 7 percent

e. Other current liabilities at the end of Year 2

f. Property, plant, and equipment at the end of Year 3 assuming that Watson Corporation neither sold nor retired depreciable assets during Year 3

g. Retained earnings at the end of Year 3

h. Long-term debt at the end of Year 3

i. The income tax rate for Year 4

j. Purchases of inventories during Year 4