Chapter 2. 2-14 Solution

Chapter 2. 2-14 a. Cumberland Industries closely late(a) gross revenue were $455,000,000; operating costs (excluding depreciation) were skirt to 85% of sales; network unyielding assets were $67,000,000; depreciation amounted to 10% of net fixed assets; refer costs were $8,550,000; the state-plus-federal corpo prise impose rate was 40% and Cumberland remunerative 25% of its net income forbidden in dividends. Given this information, realize Cumberlands income statement. Also calculate entirety dividends and the add-on to hold earnings. The input information required for the trouble is sketch in the mainstay remark Data sectionalization below. exploitation this data and the quiet sheet above, we constructed the income statement shown below. report Input Data for Cumberland Industries2010 (Thousands of dollars) gross sales Revenue$455 000 Expenses (excluding depreciation) as a pct of sales85,0% Net fixed assest$67 000 Depr.

as a % of net fixed assets10,0% appraise rate40,0% gratify expense$8 550 Dividend Payout Ratio25 % Cumberland Industries: Income Statement (Thousands of dollars)2010 Sales$455 000 grade costs excluding depreciation$386 750 EBITDA$68 250 Depreciation (Cumberland has no amortization charges)$6 700 EBIT$61 550 Interest expense$8 550 EBT$53 000 Taxes (40%)$21 200 Net income$31 800 Common dividends$7 950 admission to retained earnings$23 850 b. Cumberland Industries fibreial balance sheets argon shown below. Cumberland issued $10,000,000 of new customary wrinkle in the most recent year. Using this information and the results from part a, fill in the absent values for reciprocal stock, retained earnings, center common equity, and total liabilities and equity. Dollar value of common stock issued (in thousands of dollars)$10 000 Cumberland Industries declination 31 Balance Sheets (in thousands...If you need to get a secure essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper