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Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2018 Cash and securities $3,000 Accounts receivable 15,000 Inventories 18,000 Total current assets $36,000 Net plant and equipment $24,000 Total assets $60,000 Liabilities and Equity Accounts payable $18,630 Accruals 8,370 Notes payable 6,000 Total current liabilities $33,000 Long-term bonds $9,000 Total llabilities $42,000 Common stock $5,040 Retained earnings Total common equity 12,960 $18,000 Total liabilities and equity $60,000 Income Statement (Millions of $) 2018 Net sales $84,000 Operating costs except depreciation 78,120 Depreciation 1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest 900 Earnings before taxes (EBT) $3,300 Тахes 1,320 Net income $1,980

Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2018 Cash and securities $3,000 Accounts receivable 15,000 Inventories 18,000 Total current assets $36,000 Net plant and equipment $24,000 Total assets $60,000 Liabilities and Equity Accounts payable $18,630 Accruals 8,370 Notes payable 6,000 Total current liabilities $33,000 Long-term bonds $9,000 Total llabilities $42,000 Common stock $5,040 Retained earnings Total common equity 12,960 $18,000 Total liabilities and equity $60,000 Income Statement (Millions of $) 2018 Net sales $84,000 Operating costs except depreciation 78,120 Depreciation 1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest 900 Earnings before taxes (EBT) $3,300 Тахes 1,320 Net income $1,980

FINANCIAL ACCOUNTING
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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MINDTAP Q Search this co Notes payable 6,000 Total current liabilities $33,000 Long-term bonds $9,000 Total liabilities $42,000 Common stock $5,040 Retained earnings 12,960 Total common equity $18,000 Total liabilities and equity $60,000 Income Statement (Millions of $) 2018 Net sales $84,000 Operating costs except depreciation 78,120 Depreciation 1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest 900 Earnings before taxes (EBT) $3,300 Taxes 1,320 Net income $1,980 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $693.00 Int rate on notes payable & L-T bonds 6% Federal plus state income tax rate 40% Year-end stock price $47.52 Refer to Exhibit 4.1. What is the firm's BEP? Do not round your intermediate calculations. O a. 7.00% O b. 7.28% O C. 7,63% O d. 6.72% O e. 6.79%
Transcribed Image Text:MINDTAP Q Search this co Notes payable 6,000 Total current liabilities $33,000 Long-term bonds $9,000 Total liabilities $42,000 Common stock $5,040 Retained earnings 12,960 Total common equity $18,000 Total liabilities and equity $60,000 Income Statement (Millions of $) 2018 Net sales $84,000 Operating costs except depreciation 78,120 Depreciation 1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest 900 Earnings before taxes (EBT) $3,300 Taxes 1,320 Net income $1,980 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $693.00 Int rate on notes payable & L-T bonds 6% Federal plus state income tax rate 40% Year-end stock price $47.52 Refer to Exhibit 4.1. What is the firm's BEP? Do not round your intermediate calculations. O a. 7.00% O b. 7.28% O C. 7,63% O d. 6.72% O e. 6.79%
MINDTAP Q Search this cou Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2018 Cash and securities $3,000 Accounts receivable 15,000 Inventories 18,000 Total current assets $36,000 Net plant and equipment $24,000 Total assets $60,000 Liabilities and Equity Accounts payable $18,630 Accruals 8,370 Notes payable 6,000 Total current liabilities $33,000 Long-term bonds $9,000 Total liabilities $42,000 Common stock $5,040 Retained earnings 12,960 Total common equity $18,000 Total liabilities and equity $60,000 Income Statement (Millions of $) 2018 Net sales $84,000 Operating costs except depreciation 78,120 Depreciation 1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest 900 Earnings before taxes (EBT) $3,300 Taxes 1,320 Net income $1,980
Transcribed Image Text:MINDTAP Q Search this cou Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2018 Cash and securities $3,000 Accounts receivable 15,000 Inventories 18,000 Total current assets $36,000 Net plant and equipment $24,000 Total assets $60,000 Liabilities and Equity Accounts payable $18,630 Accruals 8,370 Notes payable 6,000 Total current liabilities $33,000 Long-term bonds $9,000 Total liabilities $42,000 Common stock $5,040 Retained earnings 12,960 Total common equity $18,000 Total liabilities and equity $60,000 Income Statement (Millions of $) 2018 Net sales $84,000 Operating costs except depreciation 78,120 Depreciation 1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest 900 Earnings before taxes (EBT) $3,300 Taxes 1,320 Net income $1,980
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