Question

In: Finance

You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...

You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:

  1. Net sales = $38,550,000.

  2. Cost of goods sold = $22,150,000.

  3. Other operating expenses = $5,700,000.

  4. Addition to retained earnings = $1,203,500.

  5. Dividends paid to preferred and common stockholders = $1,925,500.

  6. Interest expense = $1,815,000.

  7. The firm’s tax rate is 30 percent.

In 2019:

  1. Net sales are expected to increase by $9.55 million.

  2. Cost of goods sold is expected to be 60 percent of net sales.

  3. Depreciation and other operating expenses are expected to be the same as in 2018.

  4. Interest expense is expected to be $2,090,000.

  5. The tax rate is expected to be 30 percent of EBT.

  6. Dividends paid to preferred and common stockholders will not change.

Calculate the addition to retained earnings expected in 2019.

Solutions

Expert Solution


Related Solutions

You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018: Net sales = $38,450,000. Cost of goods sold = $22,130,000. Other operating expenses = $5,500,000. Addition to retained earnings = $1,201,500. Dividends paid to preferred and common stockholders = $1,920,500. Interest expense = $1,805,000. The firm’s tax rate is 30 percent. In 2019: Net sales are expected to increase by $9.45 million. Cost of goods sold is expected to be 60 percent of net...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018: Net sales = $38,500,000. Cost of goods sold = $22,140,000. Other operating expenses = $5,600,000. Addition to retained earnings = $1,202,500. Dividends paid to preferred and common stockholders = $1,923,000. Interest expense = $1,810,000. The firm’s tax rate is 30 percent. In 2019: Net sales are expected to increase by $9.50 million. Cost of goods sold is expected to be 60 percent of net...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018: Net sales = $38,700,000. Cost of goods sold = $22,180,000. Other operating expenses = $6,000,000. Addition to retained earnings = $1,206,500. Dividends paid to preferred and common stockholders = $1,933,000. Interest expense = $1,830,000. The firm’s tax rate is 30 percent. In 2019: Net sales are expected to increase by $9.70 million. Cost of goods sold is expected to be 60 percent of net...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018: Net sales = $39,150,000. Cost of goods sold = $22,270,000. Other operating expenses = $6,900,000. Addition to retained earnings = $1,215,500. Dividends paid to preferred and common stockholders = $1,955,500. Interest expense = $1,875,000. The firm’s tax rate is 30 percent. In 2019: Net sales are expected to increase by $10.15 million. Cost of goods sold is expected to be 60 percent of net...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018: Net sales = $39,100,000. Cost of goods sold = $22,260,000. Other operating expenses = $6,800,000. Addition to retained earnings = $1,214,500. Dividends paid to preferred and common stockholders = $1,953,000. Interest expense = $1,870,000. The firm’s tax rate is 30 percent. In 2019: Net sales are expected to increase by $10.10 million. Cost of goods sold is expected to be 60 percent of net...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2021:...
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2021: Net sales = $39,000,000. Cost of goods sold = $22,240,000. Other operating expenses = $6,600,000. Addition to retained earnings = $1,212,500. Dividends paid to preferred and common stockholders = $1,948,000. Interest expense = $1,860,000. The firm’s tax rate is 30 percent. In 2022: Net sales are expected to increase by $10.00 million. Cost of goods sold is expected to be 60 percent of net...
You have been given the following information for Kellygirl’s Athletic Wear Corp. for the year 2015:...
You have been given the following information for Kellygirl’s Athletic Wear Corp. for the year 2015: a. Net sales = $38,750,000. b. Cost of goods sold = $22,190,000. c. Other operating expenses = $6,100,000. d. Addition to retained earnings = $1,207,500. e. Dividends paid to preferred and common stockholders = $1,935,500. f. Interest expense = $1,835,000. g. The firm’s tax rate is 30 percent. h. In 2016, net sales are expected to increase by $9.75 million. i. Cost of goods...
Problem 2-36 Income Statement (LG2-1) You have been given the following information for PattyCake’s Athletic Wear...
Problem 2-36 Income Statement (LG2-1) You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018: Net sales = $38,900,000. Cost of goods sold = $22,220,000. Other operating expenses = $6,400,000. Addition to retained earnings = $1,210,500. Dividends paid to preferred and common stockholders = $1,943,000. Interest expense = $1,850,000. The firm’s tax rate is 30 percent. In 2019: Net sales are expected to increase by $9.90 million. Cost of goods sold is expected to...
You have been given the following information about a motel for the coming year:                             &
You have been given the following information about a motel for the coming year:                                                   (A)            Occupancy Forecast         75% (B)            Rooms department variable cost per occupied room is estimated to be     $7.75                                        (C)            Owners' investment          $800,000 (D)            Desired after tax yield on owners' investment        15% (E)             Current income tax rate                  30% (F)             The motels fixed costs for the coming year were anticipated to be                 825,000                                   (G)            The motel has this many rooms available to rent     100...
You have been given the following information for Sherry's Sandwich Corp.: Net sales = $300,000; Gross...
You have been given the following information for Sherry's Sandwich Corp.: Net sales = $300,000; Gross profit = $100,000; Addition to retained earnings = $30,000; Dividends paid to preferred and common stockholders = $8,500; Depreciation expense = $25,000. The firm's tax rate is 30 percent. What are the cost of goods sold and the interest expense for Sherry's Sandwich Corp.? explain by steps.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT