CHAPTER 4-3 - Costs 22,080.00 Taxable income $23,520.00...

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Costs 22,080.00 Taxable income $23,520.00 Taxes (34%) 7,996.80 Net income $ 15,523.20 The payout ratio is constant, so the dividends paid this year is the payout ratio from last year times net income, or: Dividends = ($5,200/$12,936)($15,523.20) Dividends = $6,240.00 And the addition to retained earnings will be: Addition to retained earnings = $15,523.20 – 6,240 Addition to retained earnings = $9,283.20 10. Below is the balance sheet with the percentage of sales for each account on the balance sheet. Notes payable, total current liabilities, long-term debt, and all equity accounts do not vary directly with sales. HEIR JORDAN CORPORATION Balance Sheet ($) (%) ($) (%) Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 3,050 8.03 Accounts payable $ 1,300 3.42 Accounts receivable 6,900 18.16 Notes payable 6,800 n/a Inventory 7,600 20.00 Total $ 8,100 n/a Total $ 17,550 46.18 Long-term debt 25,000 n/a Fixed assets Owners’ equity Net plant and Common stock and
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This note was uploaded on 07/15/2010 for the course FINANCE 318 taught by Professor Spurlin during the Spring '08 term at LA Tech.

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