Costs 22,080.00Taxable income $23,520.00Taxes (34%) 7,996.80Net income $ 15,523.20The 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 = $6,240.00And the addition to retained earnings will be:Addition to retained earnings = $15,523.20 – 6,240Addition to retained earnings = $9,283.2010. Below is the balance sheet with the percentage of sales for each account on the balance sheet. Notes payable, totalcurrent liabilities, long-term debt, and all equity accounts do not vary directly with sales.HEIR JORDAN CORPORATIONBalance Sheet($) (%) ($) (%)Assets Liabilities and Owners’ EquityCurrent assets Current liabilitiesCash $ 3,050 8.03 Accounts payable $ 1,300 3.42Accounts receivable 6,900 18.16 Notes payable 6,800 n/aInventory 7,600 20.00 Total $ 8,100 n/aTotal $ 17,550 46.18 Long-term debt 25,000 n/aFixed assets Owners’ equityNet plant and Common stock andequipment 34,500 90.79 paid-in surplus $ 15,000 n/a
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Generally Accepted Accounting Principles, payout ratio, Heir Jordan Corporation, Jordan Corporation