1) Beginning and ending Retained Earnings for Pacific Imports Ltd. were $507900 and $820,000 respectively. Net income for the year was $450,000. Stock dividends were $60,000.

Required:

How much were Pacific Import Ltd.'s cash dividends for the year?

2. Digital Medical Devices Inc. manufactures wearable heart rate monitors with a four-year warranty. Warranty costs are expected to average 6% of sales during the warranty period. The following table shows the sales and the actual warranty payments during the company's first two years of operations: