Euro Designs, inc., expects sales during 2013 to rise from the 2012 level of P3.5milliontoP3.9million.Becauseofascheduledlargeloanpayment, theinterestexpensein2013expected to drop to P325,000. The fim plans to increase its cash dividend paymentsduring 2013 to P320,000. The company's year-end 2012 income statementfollows.isEuro Designs, Inc. Income Statement for theYear Ended December 31, 2012P $3,500,0001,925,0001,575,000Sales revenueLess: Cost of goods soldGross profitsLess: Operating expenses420,000Operating profits1,155,000Less: Interest expense400,000Net profits before taxes40%)Required: Use thepercent-of-sales method755,000Less: Taxes (rate =302,000to prepare a 2013Net profits after taxes453,000proforma income250,000statementfor EuroDesigns, Inc.Less: Cash dividendsTo retained earnings$ 203,000

Solution- Sales in 2012=3500000 Cost of goods=1925000 % of cost of goods to sales=1925000/3500000…

Euro Designs, Inc., expects toP3.9million.Becauseofaschedulediargeloanpayment, theinterestexpensein2013 expected to drop to P325,000. The fim plans to increase its cash dividend payments during 2013 to P320,000. The company's year-end 2012 income statementfollows. is Euro Designs, Inc. Income Statement for the Year Ended December 31, 2012 Sales revenue P $3,500,000 Less: Cost of goods sold Gross profits Less: Operating expenses 1,925,000 1,575,000 420,000 Operating profits 1,155,000 Less: Interest expense 400,000 Required: Use the Net profits before taxes 755,000 percent-of-sales method

Euro Designs, Inc., expects toP3.9million.Becauseofaschedulediargeloanpayment, theinterestexpensein2013 expected to drop to P325,000. The fim plans to increase its cash dividend payments during 2013 to P320,000. The company's year-end 2012 income statementfollows. is Euro Designs, Inc. Income Statement for the Year Ended December 31, 2012 Sales revenue P $3,500,000 Less: Cost of goods sold Gross profits Less: Operating expenses 1,925,000 1,575,000 420,000 Operating profits 1,155,000 Less: Interest expense 400,000 Required: Use the Net profits before taxes 755,000 percent-of-sales method

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

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Quantitative Problem: Beasley Industries' sales are expected to increase from $5 million in 2017 to $6 million in 2018, or by 20%. Its assets totaled $3 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $790,000, consisting of $140,000 of accounts payable, $400,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 60%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $2 million should be entered as 2,000,000. Round your answer to the nearest dollar.
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Quantitative Problem 1: Beasley Industries' sales are expected to increase from $4 million in 2017 to $5 million in 2018, or by 25%. Its assets totaled $2 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $720,000, consisting of $140,000 of accounts payable, $350,000 of notes payable, and $230,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 50%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $2 million should be entered as 2,000,000. Round your answer to the nearest dollar
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