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trapecia [35]
3 years ago
12

Consider the following financial statement for Heir Jordan Corporation. HEIR JORDAN CORPORATION Income Statement Sales $ 48,500

Costs 34,500 Taxable income $ 14,000 Taxes (35%) 4,900 Net income $ 9,100 Dividends $ 2,900 Addition to retained earnings 6,200 A 20% growth rate in sales is projected. Prepare a pro forma income statement and balance sheet assuming that costs, assets and accounts payable vary with sales, but notes payable do not. Further assume that the dividend payout ratio remains constant.
Business
1 answer:
sp2606 [1]3 years ago
4 0

Answer:

HEIR JORDAN CORPORATION

Income Statement

Sales $ 48,500 * 120%....................58,200

Costs 34,500 * 120%........................<u>41,400</u>

Taxable income $ 14,000...............<u>16,800</u>

Taxes (35%) 4,900 ...........................5,880

Net income $ 9,100 ........................<u>10,920</u>

Dividends $ 2,900 ..(31.87%)..........3,480

Former Addition to retained earnings 6,200

New Addition to retained earnings 7,440

Explanation:

Consider the following financial statement for Heir Jordan Corporation.

HEIR JORDAN CORPORATION

Income Statement

Sales $ 48,500 * 120%....................58,200

Costs 34,500 * 120%........................<u>41,400</u>

Taxable income $ 14,000...............<u>16,800</u>

Taxes (35%) 4,900 ...........................5,880

Net income $ 9,100 ........................<u>10,920</u>

Dividends $ 2,900 ..(31.87%)..........3,480

Former Addition to retained earnings 6,200

New Addition to retained earnings 7,440

Pay out ratio is 31.87% of Net income which is derived by Dividends/Net Income

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Answer:

The present value is   $19,039

Explanation:

The computation of the Present value is shown below

= Present value of all yearly cash inflows after applying discount factor

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,  

rate is 2%  

Year = 0,1,2,3,4 and so on

Discount Factor:

For Year 1 = 1 ÷ 1.02^1 = 0.9804

For Year 2 = 1 ÷ 1.02^2 = 0.9612

For Year 3 = 1 ÷ 1.02^3 = 0.9423

For Year 4 = 1 ÷ 1.02^4 = 0.9238

So, the calculation of a Present value of all yearly cash inflows are shown below

= (Year 1 cash inflow × Present Factor of Year 1) + (Year 2 cash inflow × Present Factor of Year 2) + (Year 3 cash inflow × Present Factor of Year 3) + (Year 4 cash inflow × Present Factor of Year 4)

= ($5,000 × 0.9804) + ($5,000 × 0.9612) + ($5,000 × 0.9423) + ($5,000 × 0.9238)

= $4,901.96  + $4,805.84  + $4,711.61  + $4,619.23

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3 years ago
Menthorp Inc. wants to design a variable-pay plan that fosters teamwork and business knowledge of its employees. In order to ens
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Answer:

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Which of the following answer options are ways to prevent falls from ladders?
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Economic profit is calculated as:

Economic profit = Total Revenues – Total Cost

Total cost both includes explicit and implicit cost. In this case, the explicit cost is $8,000 while the implicit cost is $64,000. Explicit cost is a direct payment made to run the business while implicit cost is the opportunity as accountant that is lost. Therefore,

Economic profit = $150,000 – ($8,000 + $64,000)

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3 years ago
Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast fo
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Answer:

The answer is C: 14300

Note: The actual answer is 14296, <em>and </em>the closest to that was option C.

Explanation:

Formula to calculate forecast using Exponential smoothing:

  •    F_{t} = F_{t-1} + \alpha ( A_{t-1} - F_{t-1} )

Where,

  • F_{t} = New Forecast
  • F_{t-1} = Previous period's forecast.
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Data:

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  • \alpha = 0.4
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Putting <em>values in the formula:</em>

F_{5} = 14000 + 0.4(14750-14000)

F_{5} = 14000 + 0.4 (740)

F_{5} = 14000 + 296

F_{5} = 14296

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