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Use the below information to answer the following question.
Income Statement
For the Year
Sales $42,700
Cost of goods sold 29,250
Depreciation 3,750
Earnings before interest and taxes $ 9,700
Interest paid 1,360
Taxable income $ 8,340
Taxes 2,840
Net income $ 5,500
Dividends $1,925
Balance Sheet
End-of-Year
Cash $1,320
Accounts receivable 3,780
Inventory 10,200
Total current assets $15,300
Net fixed assets 33,600
Total assets $48,900
Accounts payable $ 3,650
Long-term debt 18,100
Common stock ($1 par value) 15,000
Retained earnings 12,150
Total Liab. & Equity $48,900

The profit margin, the debt-equity ratio, and the dividend payout ratio for this firm are constant. Sales are expected to increase by $5,000 next year. What is the projected addition to retained earnings for next year?

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Hubert Koch
Hubert KochLv2
28 Sep 2019

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Related questions

The most recent financial statements for Xporter, Inc., are shown here:
Income Statement Balance Sheet
Sales $ 6,900 Current assets $ 3,600 Current liabilities $ 2,200
Costs 5,400 Fixed assets 10,200 Long-term debt 3,750
Taxable income $ 1,500 Equity 7,850
Taxes (34%) 510 Total $ 13,800 Total $ 13,800
Net income $ 990

Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next year

Inc. financial statements are presented in the table below. Based on the information in the table, calculate the firm’s total debt-to-assets ratio ratio (also called Debt ratio). Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box). Balance Sheet December 31, 2015 Cash and marketable securities $187,000 Accounts payable $217,000 Accounts receivable $498,000 Notes payable $51,500 Inventories $799,000 Accrued expenses $58,300 Prepaid expenses $19,300 Total current liabilities $326,800 Total current assets $1,503,300 Long-term debt $215,400 Gross fixed assets $1,978,000 Par value and paid-in-capital $128,000 Less: accumulated depreciation $478,000 Retained Earnings $2,333,100 Net fixed assets $1,500,000 Common Equity 2,461,100 Total assets $3,003,300 Total liabilities and owner’s equity $3,003,300 Income Statement, Year of 2015 Net sales (all credit) $5,386,600.00 Less: Cost of goods sold $3,716,754.00 Selling and administrative expenses $329,000.00 Depreciation expense $138,000.00 EBIT $1,202,846.00 Interest expense $39,600.00 Earnings before taxes $1,163,246.00 Income taxes $465,298.40 Net income $697,947.60

Income Statement Balance Sheet

Year-Ended 12/31/04 12/31/04 12/31/03

Sales $1,500,000 Current Assets $50,000 $ 35,000

Cost of Good Sold 700,000 Gross Fixed Assets 1,100,000 750,000

Operating Expenses 400,000 Net Fixed Assets 450,000 300,000

Depreciation 200,000 Total Assets 500,000 335,000

Operating Income 200,000 Current Liabilities $ 25,000 $ 30,000

Interest Expense 50,000 Long-term debt 340,000 230,000

Taxable Income 150,000 Common Stock 5,000 5,000

Taxes 45,000 Retained Earnings 130,000 70,000

Net Income $ 105,000 Total Liab. & Equity 500,000 335,000

7. Given these financial statements, what is the company

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