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Required: 1. Prepare the projected income statement of Gospel Company. 2. How much is the net income? 3. How much is the dividend?

Required: 1. Prepare the projected income statement of Gospel Company. 2. How much is the net income? 3. How much is the dividend?

Essentials Of Investments
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
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Direction: Answer the problem below and forecasts the income statement using percent of sales method. (Please refer to the picture)
2. Answer the problem below and forecast the Income statement using percent of Sales Method The Gospel Company has the following statements, which are representative of the company's historical average. Gospel Company Income Statement For the year ended Dec. 31, 2018 Sales Cost of Sales Gross profit Operating expenses Earnings before interest and taxes Interest expense Earnings before taxes Taxes (35%) Net Income/Earnings after taxes 2,500,000 1,500,000) 1,000,000 (380,000) 620,000 80.000 540,000 (189,500) P 350,500 Dividends P 140,200 Additional Information: 1. The firm is expecting a 25% increase in sales next year. 2. The company expecting to declare 30% of dividend Required: 1. Prepare the projected income statement of Gospel Company. 2. How much is the net income? 3. How much is the dividend?
Transcribed Image Text:2. Answer the problem below and forecast the Income statement using percent of Sales Method The Gospel Company has the following statements, which are representative of the company's historical average. Gospel Company Income Statement For the year ended Dec. 31, 2018 Sales Cost of Sales Gross profit Operating expenses Earnings before interest and taxes Interest expense Earnings before taxes Taxes (35%) Net Income/Earnings after taxes 2,500,000 1,500,000) 1,000,000 (380,000) 620,000 80.000 540,000 (189,500) P 350,500 Dividends P 140,200 Additional Information: 1. The firm is expecting a 25% increase in sales next year. 2. The company expecting to declare 30% of dividend Required: 1. Prepare the projected income statement of Gospel Company. 2. How much is the net income? 3. How much is the dividend?
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