A company expects sales of $420 million next year assuming a 20% increase from the previous year. The firm anticipates $29.17 million in retained earnings after taxes and dividends have been paid, assuming that $1 million in depreciation expense have been deducted. Working capital is expected to represent 40% of change in sales. Required: Determine the amount of surplus (or deficit) in funds.

A company expects sales of $420 million next year assuming a 20% increase from the previous year. The firm anticipates $29.17 million in retained earnings after taxes and dividends have been paid, assuming that $1 million in depreciation expense have been deducted. Working capital is expected to represent 40% of change in sales. Required: Determine the amount of surplus (or deficit) in funds.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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