Compute the new level of net income for the company. (Select] Compute the company's addition to retained earnings for the year. | Select ] Compute the new level of total assets required. (Select] Calculate the new level of current liabilities (Select] Compute the company's new level of retained earnings on the balance sheet ISelect] Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.
Compute the new level of net income for the company. (Select] Compute the company's addition to retained earnings for the year. | Select ] Compute the new level of total assets required. (Select] Calculate the new level of current liabilities (Select] Compute the company's new level of retained earnings on the balance sheet ISelect] Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.
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
Problem 1PS
Related questions
Question
4,5,6
![INCOME STATEMENT
2020
2019
NET REVENUES &SALES (100,000 UNITS)
COST OF GOODS SOLD
GROSS PROFIT
FIXED OPERATING EXPENSES (pre depreciation)
EBITDA Earnings before Intrest, Taxes, Dep & Amorit
DEPRECIATION EXPENSE
OPERATING INCOME (EBIT)
INTEREST
INCOME BEFORE TAXES (EBT)
INCOME TAXES (40%)
NET INCOME
div
812,000 700,000
522,000 450,000
290,000 250,000
174,200 151,000
115,800 99,000
30,000 25,000
74,000
14,000
60,000
24,000
36,000
28,500
85,800
14,500
71,300
28,520
42,780
34,480
Retained Earnings 8,300
50,000
7,500
50,000
NUMBER OF SHARES OUTSTANDING
Compute the new level of net income for the company.
[ Select]
Compute the company's addition to retained earnings for the year.
[ Select]
Compute the new level of total assets required. (Select]
Calculate the new level of current liabilities (Select]
Compute the company's new level of retained earnings on the balance sheet ISelect]
Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.
( Select]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd9141896-001f-4e78-8572-207ee29bce3c%2Fcc4b21c9-6e22-4751-bea5-da61cae46cd4%2F52sic7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:INCOME STATEMENT
2020
2019
NET REVENUES &SALES (100,000 UNITS)
COST OF GOODS SOLD
GROSS PROFIT
FIXED OPERATING EXPENSES (pre depreciation)
EBITDA Earnings before Intrest, Taxes, Dep & Amorit
DEPRECIATION EXPENSE
OPERATING INCOME (EBIT)
INTEREST
INCOME BEFORE TAXES (EBT)
INCOME TAXES (40%)
NET INCOME
div
812,000 700,000
522,000 450,000
290,000 250,000
174,200 151,000
115,800 99,000
30,000 25,000
74,000
14,000
60,000
24,000
36,000
28,500
85,800
14,500
71,300
28,520
42,780
34,480
Retained Earnings 8,300
50,000
7,500
50,000
NUMBER OF SHARES OUTSTANDING
Compute the new level of net income for the company.
[ Select]
Compute the company's addition to retained earnings for the year.
[ Select]
Compute the new level of total assets required. (Select]
Calculate the new level of current liabilities (Select]
Compute the company's new level of retained earnings on the balance sheet ISelect]
Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.
( Select]
Transcribed Image Text:Farnsbeck Inc. is forecasting a 15% increase in sales next year. Assume the company is operating at 100%
capacity. The company has 50,000 shares of common stock outstanding. The firm will pay out 60% of its Net
Income in dividends and move 40% into retained earnings
Based on the Income statement and balance sheet below answer the following questions.
ASSETS
2020
2019
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
LIABILITIES AND EQUITY
ACCOUNTS PAYABLE
ACCRURALS
NOTES PAYABLE
90,480
34,800
25,420
78,000
30,000
34,000
CURRENT LAIBILITIES 150,700
145,000
TOTAL LIABILITIES 295,700
150,000
76,300
142,000
140,000
282,000
150,000
LONG TERM DEBT
COMMON STOCK ($1.00 par)
RETAINED EARNINGS
68,000
218,000
TOTAL OWNER'S EQUITY 226,300
TOTAL LIABILITIES AND EQUITY 522,000
500,000
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