At the End of 2016, Washington Corporation Reported a $40,000

question 130

Essay

At the end of 2016, Washington Corporation reported a $40,000 balance in its common stock account (par value $1 per share). The treasury stock account balance was $720 (cost $6 per share). During 2016, the company declared and paid a cash dividend of $1.50 per share.
Required:
Calculate the total amount of the 2016 cash dividend.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume.

Fixed Costs

Fixed costs include payment for rent, employee salaries, and insurance expenses, which do not vary with production or sales volume.

Operating Income

A measure of a company's profitability from its regular business operations, excluding income and expenses from non-operating activities.

Incremental Costs

Costs that change as a result of a new policy, project, or decision, essentially the difference in total costs between two alternatives.