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During 2018, Raines Umbrella Corp. had sales of $705,000. Cost of goods sold administrative and selling expenses, and depreciation expenses were $445,000, $95,000, and $140,000, respectively In addition, the company had an interest expense of $70,000 and a tax rate of 25 percent. (Ignore any tax loss carryforward provisions and assume interest expense is fully deductible.) Suppose Raines Umbrella Corp. paid out $102,000 in cash dividends. Is this possible? If spending on net fixed assets and net working capital was zero, and if no new stock was the net new long-term debt? (Do not round intermediate calculations.) Net new long-term debt
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Particulars Sales Cost of Goods Sold Gross Profit Administrative &Selling Expense Depreciation Earning before Interest and Tax Interest Expense Net Loss Amount USD 705,000.00 445,000.00 260,000.00 A B C=A-B 95,000.00 D 140,000.00 E 25,000.00F-C-D-E 70,000.00 G (45,000.00) H-F-G As there is net loss, so it is not possible to pay dividend. New Long term debt will be USD45,000.

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