CENGAGE MINDTAP Search this course Assignment 03 - Financial Statements, Cash Flow, and Taxes Consider the following scenario: Cold Goose Metal Works Inc.'s income statement reports data for its first year of operation would ke sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest 10% to 15% of earnings before interest and taxes (EBIT) 2. The company's operating costs (excluding depreciation and amortization) 70% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income before taxes (EBT) 4. In Year 2, Cold Goose expects today $150,000 and $854,250 of preferred and common stock dividends, respectively. 8 Be sure to 8 Complete the Year 2 income statement data for Cold Goose, then answer the dollar the nearest whole Cold Goose Metal Statement for Year Ending December 31 Year 2 (Forecasted) 800.000 Net Sales Less: Operating costs, except depreciation and amortir Less: Depreciation and amortization expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less Common stock dividends Contribution to retained earnings Year 1 $20,000,000 14.000.000 800,000 $5,200,000 $20,000 4,680,000 1,872,000 $2,800,000 150.000 2,658,000 702,000 $1,956,000 PM 9/17/2019 ng cengage.com/static/b/u/ev/index.htm SN 97813056359758-500149545apshot12317 CENGAGE MINDTAP Assignment 03 - Financial Statements, Cash Flow, and Taxes WELL Less Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings 520,000 4,680,000 172.000 $2,500,000 150,000 2,650.000 702,000 $1,950,000 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Cold Goose h 0 .000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Cold Goose has 200,000 shares of common stock issued and from in Year 1 to in Year 2. firm's earnings per share (EPS) is expected to change Cold Goose's before interest, taxes, depreciation and amortization (EBITDA) in Year 2 It is to say that Cold Goose's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, 51,956,000 and $2,412,750, respectively. This is because of the item reported in the Income statement involve payments and receipts of cash. Come without Home 4 5 6 7 CENGAGE MINDTAP Search this course Assignment 03 - Financial Statements, Cash Flow, and Taxes Consider the following scenario: Cold Goose Metal Works Inc.'s income statement reports data for its first year of operation would ke sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest 10% to 15% of earnings before interest and taxes (EBIT) 2. The company's operating costs (excluding depreciation and amortization) 70% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income before taxes (EBT) 4. In Year 2, Cold Goose expects today $150,000 and $854,250 of preferred and common stock dividends, respectively. 8 Be sure to 8 Complete the Year 2 income statement data for Cold Goose, then answer the dollar the nearest whole Cold Goose Metal Statement for Year Ending December 31 Year 2 (Forecasted) 800.000 Net Sales Less: Operating costs, except depreciation and amortir Less: Depreciation and amortization expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less Common stock dividends Contribution to retained earnings Year 1 $20,000,000 14.000.000 800,000 $5,200,000 $20,000 4,680,000 1,872,000 $2,800,000 150.000 2,658,000 702,000 $1,956,000 PM 9/17/2019 ng cengage.com/static/b/u/ev/index.htm SN 97813056359758-500149545apshot12317 CENGAGE MINDTAP Assignment 03 - Financial Statements, Cash Flow, and Taxes WELL Less Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings 520,000 4,680,000 172.000 $2,500,000 150,000 2,650.000 702,000 $1,950,000 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Cold Goose h 0 .000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Cold Goose has 200,000 shares of common stock issued and from in Year 1 to in Year 2. firm's earnings per share (EPS) is expected to change Cold Goose's before interest, taxes, depreciation and amortization (EBITDA) in Year 2 It is to say that Cold Goose's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, 51,956,000 and $2,412,750, respectively. This is because of the item reported in the Income statement involve payments and receipts of cash. Come without Home 4 5 6 7