10.15 Identifying Financial Statement Relations. Partial forecasts of financial statements for Watson Corporation appear in Exhibit 10.7 (income statement), Exhibit 10.8 (balance sheet), and Exhibit 10.9 (statement of cash flows). Selected amounts have been omitted, as have all totals (indicated by XXXX). 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%. 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. Questions, Exercises, Problems, and Cases 707 CHAPTER 10 Forecasting Financial Statements