# BS_IS_Solution - income as dividends to shareholders....

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Finance 254 Income Statement and Balance Sheet Solutions Balance Sheet for UberComputer.Com as of December 31, 2002 Assets Liabilities Cash \$ 400.00 Accounts Payable \$ 75.00 Accounts Receivable \$ 315.00 Short Term Debt \$ 100.00 Inventory \$ 325.00 Total Short Term Liabilities \$ 175.00 Total Current Assets \$ 1,040.00 Long Term Debt \$ 500.00 Property, Plant, and Equipment \$ 375.00 Less Accumulated Depreciation \$ (125.00) Total Liabilities \$ 675.00 Total Fixed Assets \$ 250.00 Equity Total Assets \$ 1,290.00 Common Stock \$ 120.00 Retained Earnings \$ 495.00 Total Equity \$ 615.00 Total L + E \$ 1,290.00 Income Statement, UberComputer.com for the period 1/31/2002 to 12/31/2002 Sales \$ 1,200.00 - Cost of Goods Sold \$ 800.00 = Gross Margin \$ 400.00 - Selling Expenses \$ 100.00 - General Expenses \$ 50.00 EBIT \$ 250.00 - Interest Expense \$ 50.00 EBT \$ 200.00 - Taxes \$ 80.00 = Net Income \$ 120.00 © 2003 Brian J. Henderson & Joseph M. Marks

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Now, if the payout ratio increases from 0 to 0.5, UberComputer.com pays out half of the net
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Unformatted text preview: income as dividends to shareholders. Assume that this payment is taken from their cash balance. Net income does not change! Dividends do not change net income! ( ) ( ) ( ) e tentionRat NetIncome o PayoutRati NetIncome E R AdditionTo Re 1 ) ( . . = = Balance Sheet for UberComputer.Com as of December 31, 2002 Assets Liabilities Cash \$ 340.00 Accounts Payable \$ 75.00 Accounts Receivable \$ 315.00 Short Term Debt \$ 100.00 Inventory \$ 325.00 Total Short Term Liabilities \$ 175.00 Total Current Assets \$ 980.00 Long Term Debt \$ 500.00 Property, Plant, and Equipment \$ 375.00 Less Accumulated Depreciation \$ (125.00) Total Liabilities \$ 675.00 Total Fixed Assets \$ 250.00 Equity Total Assets \$ 1,230.00 Common Stock \$ 120.00 Retained Earnings \$ 435.00 Total Equity \$ 555.00 Total L + E \$ 1,230.00 2003 Brian J. Henderson &amp; Joseph M. Marks...
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## This note was uploaded on 09/19/2009 for the course FIN FIN 221 taught by Professor Fin221 during the Fall '09 term at University of Illinois, Urbana Champaign.

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BS_IS_Solution - income as dividends to shareholders....

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