Question

the most recent financial statements for reply

Question 2 (of 10) value: 10.00 points The most recent financial statements for Reply, Inc., are shown here: Income Statement Sales Costs ance $ 30,000 Assets $55,900 Debt $ 22,300 Equity 33,600 22,000 Taxable income $ 8,000 Taxes (40%) 3,200 Net income 4,800 Total $55,900 Total$55,900 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2,300 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $33,000 What is the external financing needed? (Do not round intermediate calculations.) External financing needed Hints References eBook & Resources Hint #1

Answer 1

	Reply Inc.
			Performa Income Statement
	Sales=(A)	$         30,000.00	33000
	Cost=(B)=($22000*1.10)	$         22,000.00	$                                        24,200.00
	Taxable Income=(C )	$           8,000.00	$                                          8,800.00
	Tax @40%=(D)=(C )*40%	$           3,200.00	$                                          3,520.00
	Net Income=(E )=(C )-(D)	$           4,800.00	$                                          5,280.00
	Dividends=($5280*47.9%)=(F )	$           2,300.00	$                                          2,530.00
	Addition to Retained Earnings=(E)-(F)	$           2,500.00	$                                          2,750.00
	Dividend Payout ratio=Dividend/Net Income=($2300/$4800)	47.9%
	% increase in sales=($33000-30000)/30000	10.0%
		Reply Inc.
		Balance Sheet
				Amount
	Assets
	Current Assets	$         55,900.00	(55900*1.10)	$   61,490.00
	Total Assets
	Liabilties
	Debt	$         22,300.00		$   22,300.00
	Equity	$         33,600.00		$   33,600.00
	Retained Earnings			$     2,750.00
	EFN=($61490-$22300-$33600-$2750)			$     2,840.00
	Total Liabilities	$         55,900.00		$   61,490.00
	EFN=	$           2,840.00