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assets, fixed assets, and accounts payable increase spontaneously with sales. SCOTT, INC. 2019 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (25%) Net income $758,000 593,000 29,000 $ 136,000 25,000 $ 111,000 27,750 $ 83,250

assets, fixed assets, and accounts payable increase spontaneously with sales. SCOTT, INC. 2019 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (25%) Net income $758,000 593,000 29,000 $ 136,000 25,000 $ 111,000 27,750 $ 83,250

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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ces Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets SCOTT, INC. Balance Sheet as of December 31, 2019 Assets EFN $ 297,654 Current liabilities Accounts payable Notes payable 102,960 Total $169,380 Long-term debt Owners' equity Common stock and paid-in surplus 21,740 44,680 $434,000 Liabilities and Owners' Equity $603,380 Retained earnings Total Total liabilities and owners' equity $ 55,900 15,100 $ 71,000 $ 141,000 $120,000 271,380 $ 391,380 If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 30 percent growth rate in sales? (Do not round intermediate calculations.) $603,380
Transcribed Image Text:ces Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets SCOTT, INC. Balance Sheet as of December 31, 2019 Assets EFN $ 297,654 Current liabilities Accounts payable Notes payable 102,960 Total $169,380 Long-term debt Owners' equity Common stock and paid-in surplus 21,740 44,680 $434,000 Liabilities and Owners' Equity $603,380 Retained earnings Total Total liabilities and owners' equity $ 55,900 15,100 $ 71,000 $ 141,000 $120,000 271,380 $ 391,380 If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 30 percent growth rate in sales? (Do not round intermediate calculations.) $603,380
The most recent financial statements for Scott, Inc., appear below. Sales for 2020 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. SCOTT, INC. 2019 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (25%) Net income Dividends Addition to retained earnings $24,975 58,275 $758,000 593,000 29,000 $ 136,000 25,000 $ 111,000 27,750 $ 83,250
Transcribed Image Text:The most recent financial statements for Scott, Inc., appear below. Sales for 2020 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. SCOTT, INC. 2019 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (25%) Net income Dividends Addition to retained earnings $24,975 58,275 $758,000 593,000 29,000 $ 136,000 25,000 $ 111,000 27,750 $ 83,250
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