Question

Morrissey Technologies Inc.'s 2019 financial statements are shown here. Morrissey Technologies Inc.: Balance Sheet as of December 31, 2019 Cash $180,000 Accounts payable $360,000 360,000 Notes payable 56,000 Receivables Inventories 720,000 Accrued liabilities 180,000 Total current assets $1,260,000 Total current liabilities $596,000 Long-term debt 100,000 Fixed assets 1,440,000 Common stock 1,800,000 Retained earnings 204,000 $2,700,000 Total assets $2,700,000 Total liabilities and equity Morrissey Technologies Inc.: Income Statement for December 31, 2019 Sales $3,600,000 Operating costs including 3,279,720 depreciation EBIT $320,280 Interest 20,280 EBT $300,000 Taxes (25%) 75,000 Net Income $225,000

Answer 1

Income statement Fy 2019 Fy 2020 Sale 4140000 Operating cost EBIT 3600000 3279720 $320280 3705300 $ 434 700 Interest Expense 20280 50895 ЕСТ 300000 75000 383805 95951 Toses (25%) Net Income Dividend (60%) 225000 287854 135000 172713 Additim to Retained Earning oooo 115142 Sad Calculation Sdles four 2020 = sales of 2019 *(1+ Groth growth rate) 3600000 *(1+15%) 434700 Operating cost = % of soles ie 89.5% = 4140000 x 89.5% = 3705300 = total barrowing & Borrowing Rate (137) - (190538 + 250962) *134. = 50895 Interest Expense

Taxes = EBT * Ture Rab 383805 x 254 95951 Dividend = = | Net Income & 287854 x 172712 Dividend % 60% paio Addition to Retuined Eurning = = 287854 - 287854 - = 115142 dividend 172712 FY 2019 FY 2020 Balance sheet Particular Assets 20 7000 414000 Acc. Receivable Invertory fixed assets Total assets 180000 300000 720000 1440000 828000 16560000 3105000 2700000 594359 140538 7348 diability & Equity Payable et accurmals 540000 Stoort term bank loan 50.000 Total current liabilities 596000 long term bond 100000 Total liabilities common stock 1800000 Retuired Earning 204000 Total common Equity 2004000 Total Itability & Equity 2700000 696000 250g62 93 1500 (800000 215540 2015541 3losooo

Total asset increase by Isle so we will increase all the arred by 6 15% Cash = cash 2014 x (+15%) i 180000 xliis = 207000 Acc. Receivable a 3600.00 x(1.15) = 414000 Invertory - 72000 of (1.15) = 820000 fixed asset = 144000x (1.15) 16560000 Sum total asset = $310 5000 total liability asset tol Ratio is 3 0 % so will incrouse the ao Shood team de bank loan long term bond a Doyable & accurnal as total liability to asset's Ratio So aur total liability = 3 0% of total asset = 30% 310 Sooo 2 2015541 Canning add this year than common stock Remain same Retained earning - Previous year retained earn at - 204000 & 115192 - 2015541 Growth Refrath Rate = ROEX (1-Payout Ratio) Met income lia foy) shareholder equity = 3. 703Y.