Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales...

Question

Question

HEIR JORDAN CORPORATION Pro Forma Income Statement Sales Costs Taxable income Taxes Net income What is the projected addition to retained earnings? (Do not round intermediate calculations.) Addition to retained earnings

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Req 1.
Income Statement
Sales (42000+15%)		48300
Less: Cost (33000+15%)		37950
Taxable Income		10350
Less: Taxes (10350*21%)		2173.5
Net income		8176.5

Note:
Dividend Payout ratio = Dividend / Net income *100
	1500/ 7110 *100 = 21.10%

Req 2.
Projected net income			8176.5
Less: Dividend paid (8176.50*21.10%)			1725.24
Projected Addition to Retained earnings			6451.26

Add a comment

Answer 2

Similar Homework Help Questions

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales...

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs $43,800 34,800 Taxable income Taxes (35%) $ 9,000 3,150 Net income 5,850 Dividends Addition to retained earnings S 3,300 2,550 The projected sales growth rate is 12 percent Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all amounts as positive values. Do not round intermediate calculations.) HEIR JORDAN CORPORATION Pro Forma Income...
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales...

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 43,800 Costs 34,800 Taxable income $ 9,000 Taxes (35%) 3,150 Net income $ 5,850 Dividends $ 3,300 Addition to retained earnings 2,550 The projected sales growth rate is 12 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all amounts as positive values. Do not round intermediate calculations.) HEIR JORDAN CORPORATION...
U MUME LUT Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION...

U MUME LUT Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs $46,200 34,200 Taxable income Taxes (25%) $ 12,000 3,000 Net income $ 9,000 Dividends $2.800 Addition to retained 6200 earnings The projected sales growth rate is 12 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all answers as positive values. Do not round intermediate calculations.) HEIR JORDAN CORPORATION...

Consider the following income statement for the Heir Jordan Corporation: A 20 percent growth rate in...

Consider the following income statement for the Heir Jordan Corporation: A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all answers as positive values. Do not round intermediate calculations.) What is the projected addition to retained earnings? (Do not round intermediate calculations.) Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs $49,000...
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement...

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 43,800 Costs 34,800 Taxable income $ 9,000 Taxes (21%) 1,890 Net income $ 7,110 Dividends $ 2,518 Addition to retained earnings 4,592 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 2,700 Accounts payable $ 2,400 Accounts receivable 3,500 Notes payable 5,400 Inventory 9,000...
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales...

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs $42,000 33,000 Taxable income Taxes (21%) $9,000 1,890 Net income $ 7,110 Dividends Addition to retained $2,500 4,610 earnings The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank -...

7. Consider the following income statement Income Statement Sales Costs $49,000 40,300 Taxable income Taxes (2296)...

7. Consider the following income statement Income Statement Sales Costs $49,000 40,300 Taxable income Taxes (2296) $ 8,700 1,914 Net income $ 6,786 Dividends Addition to retained $2,400 4,386 earnings A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all answers as positive values. Do not round intermediate calculations.) HEIR JORDAN CORPORATION Pro Forma Income Statement Sales Costs Taxable income laxes...
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales...

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 46,500 Costs 36,100 Taxable income $ 10,400 Taxes (30%) 3,120 Net income $ 7,280 Dividends $ 3,100 Addition to retained earnings 4,180 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 2,600 Accounts payable $ 2,400 Accounts receivable 3,700 Notes payable 5,200 Inventory 9,000 Total $ 7,600...
91. Consider the income statement for Heir Jordan Corporation: Income Statement Sales $26,000 10,400 $15,600 5460...

91. Consider the income statement for Heir Jordan Corporation: Income Statement Sales $26,000 10,400 $15,600 5460 $10,140 for Costs Taxable income Taxes (35%) pr Net income $3,448 $6,692 op Dividends Addition to retained earnings A 22 percent growth rate in sales is projected. What is the pro forma addition to retained earnings assuming all costs vary proportionately with sales? A. $6,299 B. $7,303 C. $7,890 D. $8,011 E. $8,164

Consider the following income statement for the Heir Jordan Corporation: Sales Costs HEIR JORDAN CORPORATION Income...

Consider the following income statement for the Heir Jordan Corporation: Sales Costs HEIR JORDAN CORPORATION Income Statement $45,300 35.100 Taxable income Taxes (25%) $ 10,200 2,550 Net income $ 7,650 Dividends Addition to retained earnings $2,504 5,146 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 2,000 Accounts payable $ 2.400 Accounts receivable 4,600Notes payable 4,400 Inventory 6,400 Total $ 6,800 Total $ 13,000...

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales...

Homework Answers