Ch 03- Assignment - Financial Statements, Cash Flow, and Taxes Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (25%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings $5,200,000 520,000 4,680,000 1,170,000 $3,510,000 200,000 3,310,000 1,053,000 $2,257,000 Given the results of the previous income statement calculations, complete the following statements: $2,789,875 •In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. • Cute Camel's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2. • It is to say that Cute Camel's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,257,000 and $2,789,875, respectively. This is because of the items reported in the income statement involve payments and receipts of cash. Grade It Now Save & Continue Continue without saving
Ch 03- Assignment - Financial Statements, Cash Flow, and Taxes Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (25%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings $5,200,000 520,000 4,680,000 1,170,000 $3,510,000 200,000 3,310,000 1,053,000 $2,257,000 Given the results of the previous income statement calculations, complete the following statements: $2,789,875 •In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. • Cute Camel's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2. • It is to say that Cute Camel's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,257,000 and $2,789,875, respectively. This is because of the items reported in the income statement involve payments and receipts of cash. Grade It Now Save & Continue Continue without saving
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 38CE: Stockholder Payout Ratios The following information pertains to Milo Mindbender Corporation:...
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Transcribed Image Text:Ch 03- Assignment - Financial Statements, Cash Flow, and Taxes
Operating income (or EBIT)
Less: Interest expense
Pre-tax income (or EBT)
Less: Taxes (25%)
Earnings after taxes
Less: Preferred stock dividends
Earnings available to common shareholders
Less: Common stock dividends
Contribution to retained earnings
$5,200,000
520,000
4,680,000
1,170,000
$3,510,000
200,000
3,310,000
1,053,000
$2,257,000
Given the results of the previous income statement calculations, complete the following statements:
$2,789,875
•In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive
in annual dividends.
If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from
in Year 1 to
in Year 2.
• Cute Camel's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from
in Year 1 to
in Year 2.
• It is
to say that Cute Camel's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual
contribution to retained earnings, $2,257,000 and $2,789,875, respectively. This is because
of the items reported in the income
statement involve payments and receipts of cash.
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