Current year sales are $750,000, cost of goods sold is $400,000, and all other e
ID: 2782898 • Letter: C
Question
Current year sales are $750,000, cost of goods sold is $400,000, and all other expenses total $300,000. If sales are forecasted to increase 10% next year, and all expenses vary proportionally with sales, what is forecasted net income next year?
A company paid dividends of $13,000 this year. If ending retained earnings is $207,000 and beginning retained earnings is 180,000, was what was the net income earned for the year?
Using the information below, compute the net income of the company:
Interest expense
$ 2,000
Operating expenses
22,000
Tax expense
3,000
Cash
7,000
Sales revenue
125,000
Cost of goods sold
85,000
Interest expense
$ 2,000
Operating expenses
22,000
Tax expense
3,000
Cash
7,000
Sales revenue
125,000
Cost of goods sold
85,000
Explanation / Answer
a)
Current Net Income = 50,000. If sales grow 10% next year, net income will grow proportionately as well.
=> Next year net income = 50,000 x (1 + 10%) = 55,000
b) Net Income = Dividends + Change in retained earnings
= 13,000 + (207,000 - 180,000) = 40,000
c) Net Income = Sales - COGS - Operating expense - Interest expense - Tax expense
= 13,000
Current Sales 750,000 COGS 400,000 Other Exp 300,000 Net Income 50,000Related Questions
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