Assume the company is operating at 85%capacity. The company pays out in dividends 60% of its net incomeand moves 40% of its net income into retained earnings.ASSETS20202019CASH AND MARKETABLE SECURITIESACCOUNTS RECEIVABLEINVENTORIES29,00025,000116,000 100,000145,000 125,000290,000 250,000362,000 350,000130,000 100,000232,000 250,000TOTAL ASSETS 522,000 500,000CURRENT ASSETSGROSS PLANT AND EQUIPMENTLESS: ACCUMULATED DEPRECIATIONNET FIXED ASSETSLIABILİTIES AND EQUITYACCOUNTS PAYABLEACCRURALSNOTES PAYABLE90,48034,80025,420CURRENT LAIBILITIES 150,700 142,000145,000 140,000TOTAL LIABILITIES 295,700 282,000150,000 150,00076,30078,00030,00034,000LONG TERM DEBTCOMMON STOCK ($1.00 par).RETAINED EARNINGS68,000TOTAL OWNER'S EQUITY 226,300 218,000TOTAL LIABILITIES AND EQUITY 522,000 500,000|INCOME STATEMENT20202019NET REVENUES & SALES (100,000 UNITS)COST OF GOODS SOLDGROSS PROFITFIXED OPERATING EXPENSES (pre depreciation)EBITDA Earnings before Intrest, Taxes, Dep & AmoritDEPRECIATION EXPENSEOPERATING INCOME (EBIT)INTERESTINCOME BEFORE TAXES (EBT)INCOME TAXES (40%)NET INCOMEdiv812,000 700,000522,000 450,000290,000 250,000174,200 151,000115,80099,00030,00085,80025,00074,00014,50071,30028,52042,78014,00060,00024,00036,00028,5007,50050,00034,480Retained Earnings8,30050,000NUMBER OF SHARES OUTSTANDINGIf the firm operates at 85% capacity, at what level of sales would its fixed assets first became spontaneous?[ Select]If sales increased by 20% what would be its new Net Income? (Select ]If sales increased by 20% what would be its new level of Total Assets? (Select]Based on a 20% increase in sales compute the Additional Financing Needs for next year.[ Select)

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Assume the company is operating at 85%capacity. The company pays out in dividends 60% of its net income and moves 40% of its net income into retained earnings. ASSETS 2020 2019 CASH AND MARKETABLE SECURITIES 29,000 25,000 116,000 100,000 145,000 125,000 290,000 250,000 362,000 350,000 130,000 100,000 232,000 250,000 TOTAL ASSETS 522,000 500,000 ACCOUNTS RECEIVABLE INVENTORIES CURRENT ASSETS GROSS PLANT AND EQUIPMENT LESS: ACCUMULATED DEPRECIATION NET FIXED ASSETS

Assume the company is operating at 85%capacity. The company pays out in dividends 60% of its net income and moves 40% of its net income into retained earnings. ASSETS 2020 2019 CASH AND MARKETABLE SECURITIES 29,000 25,000 116,000 100,000 145,000 125,000 290,000 250,000 362,000 350,000 130,000 100,000 232,000 250,000 TOTAL ASSETS 522,000 500,000 ACCOUNTS RECEIVABLE INVENTORIES CURRENT ASSETS GROSS PLANT AND EQUIPMENT LESS: ACCUMULATED DEPRECIATION NET FIXED ASSETS

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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