Question

The most recent financial statements for Scott, Inc., appear below. Sales for 2020 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. 3:03 SCOTT, INC 2019 Income Statement Sales Costs Other expenses $750,000 585,000 21,000 Earnings before interest and taxes Interest expense $ 144,000 17,000 Taxable income Taxes (22%) $ 127,000 27.940 Net income $ 99,060 Dividends Addition to retained earnings $ 29,718 69,342

Answer 1

EFN = (159780/750000)*150000+(69400/750000)*150000-(99060/750000)*900000*(1-0.3) = -37393

с D E F H 1 A B SCOTT INC 2020 INCOME STATEMENT 2 3 sales 900000 assets current asset cash - 702000 66120 -25200 14300 172800 4 costs 5 other expenses 6 EBIT 7 Interest expense 8 Taxable Income 9 taxes @ 22% 10 Net Incomes account receivable inventory total balance sheet liabilities and owner's equity current liabilities 515258.8 account payable 52656 notes payable 113952 total 681866.8 long-term debt owner equity common stock and paid-in surplus retained earnings total 681866.8 total liability & equity 80420 133000 - 17000 155800 -34276 116000 fixed assets net plant and equipment 121524 nil 11 352446.8 468446.8 681866.8 12 total asset 13 dividends 14 addition to retained earning 36457.2 85066.8 15 16 17 18 19 cash balance calculation opening asset sold net income less : dividend paid changes in current asset closing balance 20940 426000 121524 -36457.2 - 16748 20 21 22 515258.8 23