Question: Prepare a pro forma income statement assuming all costs vary with sales and the dividends payout ratio is constant. A 35% growth rate in sales

Prepare a pro forma income statement assuming all costs vary with sales and the dividends payout ratio is constant.

A 35% growth rate in sales is projected. What are the projected additions to retained earnings?

ABC Company Income Statement

Sales $57,000

Costs $41,300

Taxable Income $15,700

Taxes (34%) $5,338

Net Income $10,362

Dividends $5,181

Additions to Retained Earnings $5,181

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

NOTE: Transactions up to this point have been recorded. At this point you became con- troller and are responsible for recording all further transactions. 26 The board of directors voted to purchase...

Q:

Add the excel formula Calculating net income - Excel FORMULAS DATA REVIEW HOME INSERT PAGE LAYOUT VIEW Sign In Arial 12 AA % - Paste BTU- Cells Alignment Number Conditional Formatas Cell Formatting...

Q:

The projected sales growth rate is 20 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Do not round intermediate calculations...

Q:

The projected sales growth rate is 17 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...

Q:

Chapter 4 Quiz Sales Costs $49.000 40,300 1 Taxable income Taxes (22%) $ 8,700 1.914 Net income $ 6,786 -6 unts Dividends Addition to retained earnings $2,400 4.386 3 00:39:55 A 20 percent growth...

Q:

Chapter 04 Pre-Built Problems i Saved Help Sales Costs $48,800 34,800 10 Taxable income Taxes (22%) $ 14,000 3,080 points Net income $ 10,920 eBook Print Dividends Addition to retained earnings...

Q:

The projected sales growth rate is 2 0 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. ( Do not round intermediate calculations...

Q:

A 2 0 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. Note: Input all answers as positive...

Q:

1. We are evaluating a project that costs $1,550,000, has a six-year life and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected...

Q:

Ch. 9: Questions 7&8 (Questions and Problems section) 7. Calculating IRR [LO5]A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm...

Q:

The projected sales growth rate is 18 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Do not round intermediate calculations...

Q:

Briefly identify the federal tax issue(s) and the related federal tax consequence(s) for each of the following independent factual situations. Assume cash-basis taxpayers in all situations. Assume...

Q:

Two firms are in the chocolate market. Each can choose to go for the high end of the market (high quality) or the low end (low quality). Resulting profits are given by the following payoff matrix: a....

Q:

Regarding risk levels, financial managers should Multiple Choice ped pursue higher - risk projects because they increase value. avoid higher - risk projects because they destroy value. focus...

Q:

P-1) (100 Pts.) A chemical manufacturing company (CMC) has a contract for the procurement of the neccssaly chemicals from four suppliers. The chemicals purchased from Supplier A are priced at $20...

Q:

Develop clear policy statements.

Q:

Draft a business plan.

Q:

Describe the guidelines for appropriate use of the direct plan.