(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $446,000, with a cost of goods sold of $110,000. The firm's operating expenses were $126,000, and its increase in retained earnings was $99,060. There are currently 24,000 shares of common stock outstanding, the firm pays a $1.56 dividend per share, and the firm has no interest-bearing debt. a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement. b. Compute the firm's operating profit margin.

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
icon
Related questions
Question
5:20
K
(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $446,000,
with a cost of goods sold of $110,000. The firm's operating expenses were $126,000, and its increase in retained
earnings was $99,060. There are currently 24,000 shares of common stock outstanding, the firm pays a $1.56
dividend per share, and the firm has no interest-bearing debt.
a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement.
b. Compute the firm's operating profit margin.
a. Assuming the firm's earnings are taxed at 35%, construct the firm's income statement.
Complete the income statement below: (Round to the nearest dollar.)
Income Statement
Revenues
$
Cost of Goods Sold
Gross Profit
$
F
Operating Expenses
Net Operating Income
Ś
Interest Expense
Earnings before Taxes
$
Income Taxes
Net Income
|||
LTE2
=
$
O
47%
Transcribed Image Text:5:20 K (Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $446,000, with a cost of goods sold of $110,000. The firm's operating expenses were $126,000, and its increase in retained earnings was $99,060. There are currently 24,000 shares of common stock outstanding, the firm pays a $1.56 dividend per share, and the firm has no interest-bearing debt. a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement. b. Compute the firm's operating profit margin. a. Assuming the firm's earnings are taxed at 35%, construct the firm's income statement. Complete the income statement below: (Round to the nearest dollar.) Income Statement Revenues $ Cost of Goods Sold Gross Profit $ F Operating Expenses Net Operating Income Ś Interest Expense Earnings before Taxes $ Income Taxes Net Income ||| LTE2 = $ O 47%
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education