Financial statements often serve as a starting point in formulating budgets. You are assigned to review Best Buy’s financial statements to determine its cash paid for dividends in the current year and the budgeted cash needed to pay its next year’s dividend.

Required
1. Which financial statement(s) reports the amount of
(a) Cash dividends paid and
(b) Annual cash dividends declared? Explain where on the statement(s) this information is reported.
2. Indicate the amount of cash dividends
(a) Paid in the year ended March 3, 2007, and
(b) To be paid (budgeted for) next year under the assumption that annual cash dividends equal 20% of the prior year’s net income.