Answer:
HEIR JORDAN CORPORATION
The projected addition to retained earnings is $5,743.
Explanation:
a) Data and Calculations:
HEIR JORDAN CORPORATION
Income Statement              Current Year   Projected
Sales                                      $ 49,000       $58,800 ($49,000 * 1.2)
Costs                                        40,300          48,360 (40,300 * 1.2)
Taxable income                      $ 8,700           10,440 (8,700 * 1.2)
Taxes (22%)                                1,914             2,297 (1,914 * 1.2)
Net income                            $ 6,786              8,143 (6,786 * 1.2)
Dividends                              $ 2,400             2,400
Addition to retained earnings 4,386             5,743