The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $ 75,500 Current assets $ 21,000 Long-term debt $ 54,000 Costs 59,400 Fixed assets 148,000 Equity 115,000 Taxable income $ 16, 100 Total $ 169,000 Total $ 169,000 Taxes (22%) 3,542 Net income $ 12,558 Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt - equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $
75,500 Current assets $ 21,000 Long-term debt $ 54,000 Costs 59,400 Fixed assets 148,000 Equity 115,000 Taxable
income $ 16, 100 Total $ 169,000 Total $ 169,000 Taxes (22%) 3,542 Net income $ 12,558 Assets and costs are
proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt - equity
ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Transcribed Image Text:The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $ 75,500 Current assets $ 21,000 Long-term debt $ 54,000 Costs 59,400 Fixed assets 148,000 Equity 115,000 Taxable income $ 16, 100 Total $ 169,000 Total $ 169,000 Taxes (22%) 3,542 Net income $ 12,558 Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt - equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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