Question

16 and 17 please. first photo has numbers

Income Statement Net sales $5,800 Less: Cost of goods sold 3,850 Less: Depreciation 460 Earnings before interest and taxes 1,490 Less: Interest paid 270 Taxable income $1,220 Less: Taxes 320 Net income Dividends $630 Cash Accounts rec. Inventory Total Net fixed assets Total assets Balance Sheet $ 630 Accounts payable 810 Long-term debt 540 Common stock $1,980 Retained earnings 4.930 $6.910 Total liab. & equity S 850 3,010 2,200 850 $6.910 5 900

Answer 1

working notes a) Given that selles are expected to Å by 15% projected sales - (5800X115) = 66670 Next also stated in the question that all costs, assets f current liabilities are proportional to sales so when. Sales ts corresponding figures need to be calculated b) coots i cogs (3850X115) = $4427.5 ii) Depreciation = (460X1.15)= $529 Pii Interest paid = (270 X 1.15) = $310.5 c) current liabilities here it is accounts payable = 850X1.15 = $ 977.5 d) Assets which is classified into under 2 heads current assets . Fixed assets :) cash = 630 X1,15 = 72415 as given (4930 x 1.15) ) Alc's rouble = 810 X 1,15= 9315 $5669.5 PRP) Inventory = 540X1.15=621 2) Total liability = current liability + long term debt - 971:5 + 3010 = $3987.5 (W.N.C above) - Total assets = current assets + fixed assets = 724.5 +931-5+62.1 +5669.5 $7946.5

9) Construction of protected Income Statement Net Sales (wina) - 6670.00 S cost of goods sold (w nb) (17927.50) E Depreciation (ww.b) (529.00) Earnings before interest ares - 1713.50 = Interest paid (w.nob) 310-50) Taxable income -> 1903.00 less Taxes @ 26-23%** on above (368.00) Net Income > 1035.00 h) Total equity = common stock +Retained earnings = 2200+ 1160.5 = $ 3360.5 * calculation of tax rate = taxtacable income = (320/1220110 = 26.23% j) dividend payout ratio - Dividend /rvet income = (630/900) x 100 = 10% 1036 k) calculation of Retained earnings opening balance 850 + Net Income - dividend (70/X1035) (724-5) Retained earnings 11605 2) External financing needed (ERN). EFN = Total assets - total ability - total outy = 7946.5 - 3987.5 - 3360-5 = ($ 598.5

(4) WINH Interest - - EBIT - TI 1698.62 - 717.04 921.52 Ô Tax = 528,96% 26,23 = 188.08 B.IT (6) Retained earnings old balance 850 4 wet income 528.96 e dividend (528,96*70%) (370-22] Retained earninas 100869

12 6612 calculation of retained econings when divideo reagout vatic remains constant, profit mor & sales by 14% 3 construction of income statemeot (Reverse workin Solles (5800 X L-14) (4389.04) less depen ( 2) (524.34) SOTT ( 3) 1698.62 ves loterest (want) (981.58) Taxable income 717.04 Tox (wins) 188.08 net income 528.96 werking Notes coos - 3850 /6.00 = 66.32") & So 6612 X 663) = 4381.04 egon = saurs - cog- EBLT 6612-0389-04- KE 169.62 = 524.34 EBLT / SILE = (1490/58007160 = 25.69% = 642X25.697 = 1698.62 -