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3 years ago

Pro forma income statement

Business

1 answer:

worty [1.4K]3 years ago

3 0

Answer:

Austin Grocers

1. Projected 2017 Net Income

= $102 million

2. Expected Growth Rate in Dividends

= 6.25% (2/32 x 100)

Explanation:

a) Income statement (in millions of dollars):

2016 2017

$'millions $'millions

Sales $700 $840

Operating costs

including depreciation 500 630

EBIT $200 $210

Interest 40 40

EBT $160 $170

Taxes (40%) 64 68

Net income $96 $102

Dividends $32 $34

Addition to

retained earnings $64 $68

b) Sales for 2017 = $840 million ($700 x 1.2)

c) Operating costs for 2017 = $630 million ($840 x75%)

d) Taxes for 2017 = $68million ($170 x 40%)

e) Dividend payout ratio = Dividend/Net Income = 33.33%

f) Growth Rate in Dividends = Dividend Increase/Previous year's dividend x 100 = 6.25% (2/32 x 100)

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3 years ago

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Answer:

Part 1

$9.60

Part 2

$11,129

Part 3

Journal 1

Debit : Overheads $172,500

Credit : Equipment lease $ 6,800

Credit : Depreciation on building 19,340

Credit : Indirect labor 90,400

Credit : Utilities 14,560

Credit : Other overhead 41,400

Being overheads incurred

Journal 2

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Credit : Overheads $173,760

Being overheads applied

Part 4

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Part 5

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Explanation:

Overhead rate = Budgeted Overheads ÷ Budgeted Activity

= $129,600 ÷ 13,500

= $9.60

Total cost (Job K456) = $2,750 + $5,355 + $3,024 = $11,129

Actual Overheads = $ 6,800 + $19,340 + $90,400 + $14,560 + $41,400 = $172,500

Applied overheads = 18,100 x $9.60 = $173,760

Since, Actual Overheads < Applied overheads, overheads have been under-applied. Amount of under-applied overheads is $1,260 ($173,760 - $172,500)

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3 years ago

Mia Lane bought a high-definition television for $7,500. Based on her income, she could afford to pay back only $600 per month.

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Answer:

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Explanation:

Please see attachment

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3 years ago

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Answer and Explanation:

The calculation of the revised net operating income per month in the following cases:

1. The sales volume increases by 50 units.

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Less: Variable expenses (8,550 units × $19) $162,450

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Less: Fixed expenses $55,200

Net operating income $47,400

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Less: Variable expenses (7,500 units × $19) $142,500

Contribution margin $90,000

Less: Fixed expenses $55,200

Net operating income $34,800

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3 years ago