Cumberland Industries\' partial balance sheets are shown below. Cumberland issue
ID: 2818860 • Letter: C
Question
Cumberland Industries' partial balance sheets are shown below. Cumberland issued new common stock in the most recent year. Using this information and the results from PART A, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.
PART A ANSWERS:
Key Input Data for Cumberland Industries 2017 (Thousands of dollars) Sales Revenue $475,000 Expenses (excluding depreciation) as a percent of sales 75.0% Net fixed assets $85,000 Depr. as a % of net fixed assets 10.0% Tax rate 40.0% Interest expense $9,000.00 Dividend Payout Ratio 50% Cumberland Industries: Income Statement (Thousands of dollars) 2017 Sales $475,000 Operating costs excluding depreciation $356,250 EBITDA $118,750 Depreciation (Cumberland has no amortization charges) $8,500 EBIT $110,250 Interest expense $9,000 EBT $101,250 Taxes (40%) $40,500 Net income $60,750 Common dividends $30,375 Addition to retained earnings $30,375Explanation / Answer
Answer:
Retained Earnings, 2017 = Retained Earnings, 2016 + Addition to Retained Earnings
Retained Earnings, 2017 = $38,774 + $30,375
Retained Earnings, 2017 = $69,149
Total Assets = Total Liabilities and Equity
$333,485 = Total Liabilities and Equity, 2017
Total Liabilities and Equity, 2017 = Total Liabilities, 2017 + Total Common Equity, 2017
$333,485 = $160,836 + Total Common Equity, 2017
Total Common Equity, 2017 = $172,649
Total Common Equity = Common Stock + Retained Earnings
$172,649 = Common Stock, 2017 + $69,149
Common Stock, 2017 = $103,500
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