Question

Outlaws is a general goods retail chain in the High Plains region. Outlaws is forecasting its financial statements for Year 3. Selected financial information for Years 1 and 2 is provided in the table. What is Retained Earnings for Year 3?

Forecast Year 3 $30,817 621 Selected Financial Information Outlaws Inc. ($ millions) Year 2 Ratios (to Sales) Revenue 29,210 Cost of Goods Sold 22,152 0.758370 | SG&A 5,245 0.179562 | Depreciation Expense 621 EBIT 1,192 Interest Expense 277 Earnings before Taxes 915 | Provision for Income Taxes 288 0.35* Net Income $627 Dividends Retained Earnings $5,089 | Owner's Equity $6,281 *The tax rate is a percentage of Earnings Before Tax. 277 $225

Looking for the process work to get the answer of $5537.

Answer 1

Revenue Less: Cost of goods sold Less: SG&A Less: Depreciation EBIT Less: Interest expense EBT Less: Tax Net income Less: Dividends Addition to Retained Earnings $ 30,817 $ 23,371 =30817*0.75837 $ 5,534 =30817*0.179562 $ 621 $ 1,292 $ 277 $ 1,015 $ 355 =+B7*0.35 $ 660 $ 225 $ 435 Retained Earnings for Year 3 $ 5,524 =+B12+B11 Select nearest option $5,537

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