Problem 4-9 Calculating Retained Earnings from Pro Forma Income [LO1]Consider the following income statement for the Heir Jordan Corporation:HEIR JORDAN CORPORATIONIncome StatementSalesCostsTaxable incomeTaxes (21%)Net incomeDividendsAddition to retained earningsHEIR JORDAN CORPORATIONPro Forma Income StatementSSalesCostsTaxable incomeTaxesNet income$1,5005,610The projected sales growth rate is 15 percent. Prepare a pro forma income statementassuming costs vary with sales and the dividend payout ratio is constant. (Do not roundIntermediate calculations and round your answers to the nearest whole number, e.g.,32.)Addition to retained earnings$ 42,00033,0006,300$ 9,0001,890$ 7,110What is the projected addition to retained earnings? (Do not round Intermediatecalculations and round your answer to the nearest whole number, e.g., 32.)

Retained earnings are the amount of profit a company has left over after paying all its direct…

Answered: Problem 4-9 Calculating Retained…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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hich of the following is leakages from the circular flow in a closed economy? a. household saving and government spending b. government spending and business investment c. household saving and net taxes d. household saving and business investment
1
A. Devine and Vicky are partners dealing in cosmetics and other assorted goods. They share profit and losses in ratio 3:2. The trial balance below was extracted from the books of the partners as at 31“ December, 2020. DR CR Rent Expenses 400,000 Bank overdraft 100,000 Discount 50,000 100,000 Turnover 2,100,000 Cost of Sales 700,000 Receivable 400,000 Patent 400,000 Stocks (31/12/2019) 150,000 Loan from Devine at 15% per annum 200,000 Land 900,000 Motor vehicle 600,000 Equipment 400,000 Provision for depreciation:
Use the following information for Cronos Group, Inc. (CRON): EBIT / Revenue 25.50% Government Tax Rate 42.50% Revenue / Assets 1.95 times Current Ratio 3.15 times EBT / EBIT 0.80 times Assets / Equity 2.00 times Its interest coverage ratio is closest to: A. 2.50. B. 5.00. C. 7.15. D. 9.25.
What is the annual rate of return on the stock (percentage) before tax?
QUESTION 6 A service-based company reports gross revenue of $125,000; sales discounts of $4,500; allowance for doubtful accounts of $6,000; operating expenses of $89,600; and a loss on sale of PP&E of $2,000. What is the company's net income after taxes assuming a tax rate of 20%?
Problem 19.17 If projected sales growth is actually 8.80%, Calculate the EFN. (Refer to Exhibits 19.10 and 19.11.) (Round answer to 2 decimal places, e.g. 0.45. Enter negative amount using either a negative sign preceding the number e.g. -0.45 or parentheses e.g. (0.45).) Exhibit 19.10 Empire Enterprises: Pro Forma Income Statement and Balance Sheet ($ millions) Income Statement Net sales $ 120.0 Costs 108.0 Net income $ 12.0 Dividends 24 $ 7.2 Additions to retained earnings $ 4.8 Balance Sheet Assets Liabilities and Stockholders' Equity Change Change Assets $ 60.0 S 10.0 Total debt $ 20.0 $0.0 4.8 Equity Total liabilities and stockholder's equity 34.8 Total assets $ 60.0 $ 10.0 $ 54.8 $ 5.2 $ 4.8 External financing needed (EFN) $ 5.2 The pro forma balance sheet for Empire Enterprises does not balance, and the difference is the amount of EFN. Because the company's board does not wish to issue common stock, the funding will have to take the form of long-term debt.
Residual Income Valuation Method Suppose that BKE has the following: Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 Common shareholders' equity at beginning of year $ 4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $ 5,001.22 $ 5,503.76 Comprehensive income available for common shareholders 1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $ 2,003.45 Their required rate of return is 9.25% Their long run growth rate is 4.20% They have 750 M shares of stock. Market Based Valuation Methods Suppose that BKE has the following: BKE Price $ 87.21 Number of shares (K) 64,575 Book value of equity K$ 588,324 EPS 6.75
Assume a firm increases its revenue by $148 while increasing its cost of goods sold by $117. How much additional tax will the firm owe if its marginal tax rate is 21%? Multiple Choice $6.51 $10.86 $17.11 $28.36

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