Begin with the partial model in the file Ch06 P14 Build a Model.xlsx on the textbooks Web

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Begin with the partial model in the file Ch06 P14 Build a Model.xlsx on the textbook’s Web site.

a. The 2018 sales of Cumberland Industries were $455 million; operating costs (excluding depreciation) were equal to 85% of sales; net fixed assets were $67 million; depreciation amounted to 10% of net fixed assets;

interest expenses were $8.55 million; the state-plus-federal corporate tax rate was 40%; and Cumberland paid 25% of its net income out in dividends. Given this information, construct Cumberland’s 2018 income statement. Also calculate total dividends and the addition to retained earnings.

b. The partial balance sheets of Cumberland Industries are shown here.

Cumberland issued $10 million of new common stock in 2018. Using this information and the results from part

a, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.image text in transcribed

c. Construct the statement of cash flows for 2018.

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Intermediate Financial Management

ISBN: 9781337395083

13th Edition

Authors: Eugene F. Brigham, Phillip R. Daves

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