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…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 74E

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Question 24 What is Orange Corporation's sustainable growth rate? Use Exhibit II. Orange Corporation Income Statement ($ in millions) Sales Costs Taxable Income Taxes Net Income Ret. Earnings Dividends Orange Corporation Balance Sheet ($ in millions) Exhibit II (Use for Problems 4.22, 4.23, Year 1 275 220 55 19 36 30 6
Question 4 The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference dividend declared and fully paid in 2020: RM100,000 Ordinary dividend declared and fully paid in 2020: RM3,960,000 Preference shares marketable price per unit at 31 December 2020: RM4.60 Ordinary share marketable price per unit at 31 December 2020: RM9.00 2. From the industry average, identify and comment on Tanaka Bhd’s profitability and short-term liquidity.
Question 4 The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference dividend declared and fully paid in 2020: RM100,000 Ordinary dividend declared and fully paid in 2020: RM3,960,000 Preference shares marketable price per unit at 31 December 2020: RM4.60 Ordinary share marketable price per unit at 31 December 2020: RM9.00 Required: Calculate the following ratio for 2020: Industry average ratio Profit margin 4.0% Earnings per share RM0.46 Rate of return on total assets 11.0%
Question 31 Decker Enterprises Below are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating liabilities. Income statement Current Projected Sales na 1,500 Costs na 1,080 Profit before tax na 420 Taxes (25%) na 105 Net income na 315 Dividends na 95 Balance sheets Current Projected Current Projected Current assets 100 115 Current liabilities 70 81 Net fixed assets 1,200 1,440 Long-term debt 300 360 Common stock 500 500 Retained earnings 430 650 If Decker had a financing deficit, it could…
Questions from no. 9 to no. 11 are based on the following fact. Boulder, Inc., obtained 90 percent of Rock Corporation on January 1, 2016. Annual amortization of $22,000 is applicable on the allocations of Rock's acquisition-date business fair value. On January 1, 2017, Rock acquired 75 percent of Stone Company's voting stock. Excess business fair-value amortization on this second acquisition amounted to $8,000 per year. For 2018, each of the three companies reported the following information accumulated by its separate accounting. system. Separate operating income figures do not include any investment or dividend income: Separate Operating Boulder Rock Stone Income $245,000 85,000 150,000 Dividends Declared $120,000 28,000 42,000
D Question 6 Jaffers Corporation has a current ratio (defined as current assets dividend by current liabilities) of 1.7 as of the end of 2020. Which of the following transaction would increase the current ratio? O Jaffers receives payment of an outstanding account receivable. O Jaffers pays an outstanding long-term liability Jaffers purchases more inventory on account. Jaffers issues long-term debt and receives cash Question 7 Quantum, LLC. Reported net income of $8,840,984 and a net cash inflow from operations of $9,820,659 for 2021. Quantum, LLC. used the straight-line depreciation method to determine depreciation expense for 2021 of $1,729,100. If Quantum, LLC. had used the double-declining balance depreciation method, depreciation expense for 2021 would have been $2.950,000. Required: What would cash flow from operations have been if Quantum, LLC. had used the double- declining balance method? Enter your answer in dollar with no $ or commas
Problem 1. Use the following information for the next two questions: The following items were presented for the purpose of determining comprehensive income. Profit for the year 2,000 Increase in revaluation surplus 1,000 Remeasurements of the net defined benefit liability (asset) - loss (200) Net change in translation of foreign operation (400) Dividends declared (100) Stock rights 300 1. How much is the other comprehensive income? a) 400 b) 600 c) 800 d) 2,000 2. How much is the total comprehensive income? a) 1,800 b) 2,200 c) 2,400 d) 2,800
a. P30,000 decrease b. P40,000 increase C. P50,000 increase d. P90,000 increase Parducho receive if profits and losses are distributed based on the ratio of d average capital balances? a. P360,000 b. P387,500 c. P440,000 d. P453,200 12. Which of the following is not a component of the formula used to distribute profit? a. After all other allocations, the remainder divided according to the profit and loss sharing ratio. b. Salary allowances to the managing partners. Interest on the average capital investments. C. d. Interest on notes to partners. 13. A partner has a capital balance of P400,000 for five months, P500,000 for four months, and P600,000 for three months. The average capital balance is a. P483,333. b. P485,000. C. P491,680. d. P500,000. 14. Arzadon, Ballada and Castro are partners. Their contributions are as follows: Arzadon, P600,000; Ballada, P400,000 and Castro, services. Partners Arzadon, Ballada and Castro agreed to divide profits or losses in the ratio of 35:25:40,…
Partial Income Statement Excel Exercise Compute the Following ՀԱՐ Sales COGS SG&A Depreciation Debt Int. Rate Tax Rate* 2019 100 40 EBITDA EBIT 25 Interest 10 EBT 0.08 Tax 0.25 Net Income ? ? ? ? ? ? Partial Balance Sheet Debt and Loans 150 Total Equity 150 Total Assets 300 Inv. Change 10 A/R Change A/P Change 35 20 Net Profit Margin Equity Multiplier Verify Dupont ROE ? סיי ? ? ? ? ? * Assume all taxes paid in current period (no accrued taxes) for rest of course CF from Operations ROE Asset Turnover CED Tt O 24
C $ 4 Terminology Matching Profitability Ratios Rationalization Return on Assets Ratio Return on Common Stockholders' Equity Ratio Sarbanes-Oxley Act Solvency Ratios Sustainable Income The Human Element Times Interest Earned Vertical Analysis % si se 6 & 7 * 00 8 A measure of company's solvency and ability to meet interest payments as they come due; calculated as the sum of net income, interest expenses and income tax expense divided by interest expense This is a profitability measure that indicates the amount of net income generated by each dollar of assets. It is computed as net income divided hv average total assets A technique for evaluating financial statement data that expresses each item in a financial statement as a percentage of a base amount Fatigue, carelessness, indifference, collusion Measures of the ability of a company to survive over a long period of time A measure of the dollars of net income earned for each dollar invested by the owners; computed as income available…
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $1,078,700 $929,900 $781,400 $667,900 $566,000 Interest expense 366,800 334,800 289,100 220,400 175,500 Income tax expense 345,184 260,372 218,792 173,654 135,840 Total assets (ending balance) 8,226,651 8,779,231 6,276,721 6,620,869 5,020,826 Total stockholders' equity (ending balance) 2,543,681 3,148,667 2,003,133 2,553,135 1,531,881 Average total assets 8,502,941 7,527,976 6,448,795 5,517,391 4,722,930 Average stockholders' equity 2,846,174 2,575,900 2,278,134 2,042,508 1,808,307 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:…
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $1,078,700 $929,900 $781,400 $667,900 $566,000 Interest expense 366,800 334,800 289,100 220,400 175,500 Income tax expense 345,184 260,372 218,792 173,654 135,840 Total assets (ending balance) 8,226,651 8,779,231 6,276,721 6,620,869 5,020,826 Total stockholders' equity (ending balance) 2,543,681 3,148,667 2,003,133 2,553,135 1,531,881 Average total assets 8,502,941 7,527,976 6,448,795 5,517,391 4,722,930 Average stockholders' equity 2,846,174 2,575,900 2,278,134 2,042,508 1,808,307 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:…

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