IENT 2020 2019 NET REVENUES &SALES (100,000 UNITS) COST OF GOODS SOLD GROSS PROFIT 812,000 700,000| 522,000 450,000 290,000 250,000 174,200 151,000 115,800 99,000 FIXED OPERATING EXPENSES (pre depreciation) EBITDA Earnings before Intrest, Taxes, Dep & Amorit
IENT 2020 2019 NET REVENUES &SALES (100,000 UNITS) COST OF GOODS SOLD GROSS PROFIT 812,000 700,000| 522,000 450,000 290,000 250,000 174,200 151,000 115,800 99,000 FIXED OPERATING EXPENSES (pre depreciation) EBITDA Earnings before Intrest, Taxes, Dep & Amorit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
4,5,6,7
![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
85,800
14,500
71,300
28,520
74,000
14,000
60,000
24,000
42,780
36,000
34,480
Retained Earnings 8,300
50,000
28,500
7,500
50,000
NUMBER OF SHARES OUTSTANDING
At 85% capacity what level will sales have to reach for the discretionary items to become spontaneous, that is
move in direct proportion to sales? (Select)
Compute the new level of net income for the company [Select]
Compute the company's additional 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 [Select]
Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd9141896-001f-4e78-8572-207ee29bce3c%2F296ad4d5-6be2-49f5-b05e-04dceb1cb3d1%2Fuild4dn_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
85,800
14,500
71,300
28,520
74,000
14,000
60,000
24,000
42,780
36,000
34,480
Retained Earnings 8,300
50,000
28,500
7,500
50,000
NUMBER OF SHARES OUTSTANDING
At 85% capacity what level will sales have to reach for the discretionary items to become spontaneous, that is
move in direct proportion to sales? (Select)
Compute the new level of net income for the company [Select]
Compute the company's additional 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 [Select]
Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.
Transcribed Image Text:Farnsbeck Inc. is forecasting a 15% increase in sales next year. Assume the company is operating at 85%
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
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
CASH AND MARKETABLE SECURITIES
ACCOUNTS RECEIVABLE
INVENTORIES
CURRENT ASSETS
GROSS PLANT AND EQUIPMENT
LESS: ACCUMULATED DEPRECIATION
NET FIXED ASSETS
LIABILITIES AND EQUITY
78,000
30,000
34,000
90,480
34,800
25,420
CURRENT LAIBILITIES 150,700 |142,000|
145,000 140,000
TOTAL LIABILITIES 295,700 282,000
150,000 150,000|
76,300
ACCOUNTS PAYABLE
ACCRURALS
NOTES PAYABLE
LONG TERM DEBT
COMMON STOCK ($1.00 par)
RETAINED EARNINGS
68,000
TOTAL OWNER'S EQUITY 226,300 |218,000
TOTAL LIABILITIES AND EQUITY 522,000 500,000
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