Question

We have Cromwells financial statements from this year. Income Statement Sales 1,000,000 (250,000) (180,000) 570,000 (130,000) 440,000 (132,000) 308,000 Costs Depreciation EBIT Interest expense EBT Taxes (.3) Net Income Dividends 231,000 Additions to Retained Earnings 77,000

Balance Sheet Cash 60,000 25,000 85,000 70,000 Accounts pay 30,000 80,000 180,000 Accounts rec Notes payable Inventory Current Liab Current Assets Long-term debt 250,000 Fixed Assets 750.000 Owners Equity Common stock 90,000 505,000 595,000 Retained earnings Total OE Total Assets 930,000 Total Liab & OE 930,000 Continuing with the Cromwell problem. Given that our ratio of fixed assets needed at full capacity is.638, Cromwell is operating at only 85 percent capacity and they still expect to grow at 20 percent, what is the new fixed assets needed? Round to the nearest whole number and no commas.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

New fixed assets needed:

= Total fixed assets required-Existing fixed assets

= $1,000,000×(1+20%)×0.638-$750,000

= $765,600-$750,000

= $15,600

Hence, fixed assets needed its $15,600.

Add a comment
Know the answer?
Add Answer to:
We have Cromwell's financial statements from this year. Income Statement Sales 1,000,000 (250,000) (180,000) 570,000 (130,000)...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Continuing with the previous problem, Cromwell's projected Income Statement is: Income Statement Projected 1,200,000 (300,000) (180,000)...

    Continuing with the previous problem, Cromwell's projected Income Statement is: Income Statement Projected 1,200,000 (300,000) (180,000) 720,000 (130,000) 590,000 (177,000) 413,000 Sales 1,000,000 (250,000) (180,000) 570,000 (130,000) 440,000 (132,000) Costs Depreciation EBIT Interest expense EBT Taxes (.3) Net Income 308,000 Dividends 231,000 309,750 Additions to Retained Earnings 77,000 103,250 This year's Balance Sheet is Balance Sheet Cash 70,000 Accounts pay Notes payable Current Liab 60,000 25,000 85,000 Accounts rec 30,000 Inventory 80,000 Current Assets 180,000 Long-term debt 250,000 Fixed Assets...

  • Let's change capacity to 90 percent and recalculate external financing needed. We have Cromwell's financial statements...

    Let's change capacity to 90 percent and recalculate external financing needed. We have Cromwell's financial statements from this year. Income Statement Sales 1,000,000 (250,000) (180,000) 570,000 (130,000) 440,000 (132,000) 308,000 Costs Depreciation EBIT Interest expense EBT Taxes (.3) Net Income Dividends 231,000 Additions to Retained Earnings 77,000 Balance Sheet Cash 70,000 Accounts pay 60,000 Accounts rec 30,000 Notes payable 25,000 Inventory 80,000 Current Liab 85,000 Current Assets 180,000 Long-term debt 250,000 Fixed Assets 750,000 Owners' Equity Common stock 90,000 505,000...

  • We have Cromwell's financial statements from this year. Income Statement Sales 1,000,000 (250,000) (180,000) 570,000 (130,000)...

    We have Cromwell's financial statements from this year. Income Statement Sales 1,000,000 (250,000) (180,000) 570,000 (130,000) 440,000 (132,000) 308,000 Costs Depreciation EBIT Interest expense EBT Taxes (.3) Net Income Dividends 231,000 Additions to Retained Earnings 77,000 We were unable to transcribe this image

  • VanRee Recycling Inc. is expecting sales to rise 18 percent next year. Their most recent income...

    VanRee Recycling Inc. is expecting sales to rise 18 percent next year. Their most recent income statement and next year's projected income statement are below Income Statement This Year 1,000,000 (400,000) (180,000) 420,000 (130,000) 290,000 (87,000) 203,000 Projected 1,180,000 (472,000) (180,000) 528,000 (130,000) 398,000 (119,400), 278,600 Sales Costs Depreciation EBIT Interest expense EBT Taxes (.3) Net Income Dividends 121,800 167,160 Additions to Retained Earnings 81,200 111,440 This year's Balance Sheet is Balance Sheet 60,000 25,000 85,000 Cash 70,000 30,000 80,000...

  • VanRee Recycling Inc. is expecting sales to rise 12 percent next year. Their most recent income...

    VanRee Recycling Inc. is expecting sales to rise 12 percent next year. Their most recent income statement and next year's projected income statement are below Income Statement This Year ecte 1,120,000 (481,600) (180,000) 458,400 (130,000) 328,400 Sales 1,000,000 (430,000) (180,000) 390,000 (130,000) 260,000 (78,000) 182,000 Costs Depreciation EBIT Interest expense EBT Taxes (.3) (98,520 Net Income 229,880 Dividends 109,200 137,928 Additions to Retained Earnings 72,800 91,952 This year's Balance Sheet is: Balance Sheet Cash 70,000 30,000 80,000 Accounts pay 60,000...

  • The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 250,000...

    The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 250,000 Costs 175,000 EBIT $ 75,000 Interest expense 15,000 Taxable income $ 60,000 Taxes (at 21%) 12,600 Net income $ 47,400 Dividends $ 28,440 Addition to retained earnings $ 18,960    BALANCE SHEET, YEAR-END, 2019 Assets Liabilities Current assets Current liabilities Cash $ 8,000 Accounts payable $ 15,000 Accounts receivable 13,000 Total current liabilities $ 15,000 Inventories 29,000 Long-term debt 150,000 Total current assets $...

  • Given the most recent financial statements for Microsoft (FY2019). Sales for FY2020 are expected to grow...

    Given the most recent financial statements for Microsoft (FY2019). Sales for FY2020 are expected to grow by 4 percent. The following assumption must hold in the pro forma financial statements. The tax rate (percentage) and the dividend payout ratio (percentage) will remain constant. COGS, SGA, Depreciation, Interest Expense, Cash, Account Receivable, Inventory, Other Current Assets, and Net Fixed Asset increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity are issued, calculate...

  • 15. Use the below information to answer the following question. Income Statement For the Year   Sales...

    15. Use the below information to answer the following question. Income Statement For the Year   Sales $42,700   Cost of goods sold 29,250   Depreciation 3,750   Earnings before interest and taxes $ 9,700   Interest paid 1,360   Taxable income $ 8,340   Taxes 2,840   Net income $ 5,500 Dividends $1,925 Balance Sheet End-of-Year   Cash $1,320   Accounts receivable 3,780   Inventory 10,200   Total current assets $15,300   Net fixed assets 33,600   Total assets $48,900   Accounts payable $ 3,650   Long-term debt 18,100   Common stock ($1 par value) 15,000...

  • Question Completion Status: Income Statement For the Year Sales Cost of goods sold Depreciation Earnings before...

    Question Completion Status: Income Statement For the Year Sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income $42,700 29,250 3,750 $ 9,700 1,360 $ 8,340 Taxes 2,840 Net income $ 5,500 Dividends $1,925 Balance Sheet End-of-Year Cash Accounts receivable Inventory Total current assets $ 1,320 3,780 10,200 $15,300 33,600 $48,900 Net fixed assets Total assets $ 3,650 18,100 Accounts payable Long-term debt Common stock ($1 par value) Retained earnings 15,000 12.150 End-of-Year Cash $...

  • USE THE FOLLOWING DATA TO ANSWER QUESTIONS 35-40 Annual Income Statements 2013 Sales 500,000 COGS ????...

    USE THE FOLLOWING DATA TO ANSWER QUESTIONS 35-40 Annual Income Statements 2013 Sales 500,000 COGS ???? Gross profit 380,000 Oper. exp 225,000 Depreciation 15,000 Operating profit 140,000 Interest exp. 5,000 EBT 135,000 Taxes 50,000 Net Income 85,000 2014 560,000 149,350 410,650 250,100 15,000 145,550 5,000 140,550 56,000 84,550 2014 Cash Accounts rec Inventories Current Assets Net fixed assets Total Assets Annual Balance Sheets 2013 450,000 275,000 280.000 1,005,000 1.125.000 2,130,000 478,500 250,000 325,000 1,053,500 ??? 2,293,500 Notes payable Accounts payable...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT