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Problem 4-3 Lap Dogs Inc. is planning for next year and has the summarized results given below The firm pays interest of 13% on all borrowing and is subject to an overall tax rate of 35%. It paid interest of $10,000 this year and plans a $75,000 dividend next year. Complete Lap Dogs forecast of next years financial statements. Enter your answers in thousands. For example, an answer of $12 thousands should be entered as 12, not 12,000. Enter all amounts as a positive numbers Income Statemen EBIT Interest EBT Income Tax Net Income $288 Balance Shee his Year Next Year Assets Current Liabilities Debt Equity Total Liab & Equity $559 60 255 244 $559 $772 90 $772

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first the given information in the question is recorded , then the required information is found starting from the interest paid

1 interest 2 tax rate 3 interest paid 4 0.13 0.35 10000 75000 dividend next year 6 EBIT 7 interest 8 EBT 9income tax 10 net income 288 10 278 97 181 Balance sheet 12 13 14 assets 15 current liabilities 16 Debt 17 Equity 18 Total Liab & Equity 19 20 This year Next Year 559 255 244 559 90 422 350

1 interest 2 tax rate 3 interest paid 4 0.13 0.35 10000 75000 dividend next year 6 EBIT 7 interest 8 EBT 9income tax 10 net income 288 B3/1000 B6-B7 B8*B2 B8-B9 Balance sheet This year 559 12 13 14 assets 15 current liabilities 16 Debt 17 Equi 18 Total Liab & Equity 19 Next Year 772 90 -C18-C17 255 244 559 (B10-(B4/1000))+817 772

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