The following information for Kellygirl\'s Athletic Wear Corp. for the year 2008
ID: 2635250 • Letter: T
Question
The following information for Kellygirl's Athletic Wear Corp. for the year 2008:
Calculate the addition to retained earnings expected in 2009. (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)
a. Net sales = $24,300,000. b. Cost of goods sold = $15,700,000. c. Addition to retained earnings = $1,050,000. d. Dividends paid to preferred and common stockholders = $1,375,000. e. Interest expense = $925,000. f. The firm's tax rate is 30 percent. g. In 2009, net sales are expected to increase by $2.2million. h. Cost of goods sold is expected to be 65 percent of net sales. i. Expensed depreciation is expected to be the same as in 2008. j. Interest expense is expected to be $1,300,000. k. The tax rate is expected to be 30 percent of EBT. l. Dividends paid to preferred and common stock holders will not change.Explanation / Answer
Particular Formulae Amount Sales =24300000+2000000 26300000 Cost =0.65*(24300000+2000000) 17095000 Interest 1300000 1300000 Income=(sales-cost-interest) 7905000 Tax @30% 2371500 Income after Tax 5533500 Dividend Paid 1375000 Retained Earning=5533500-1375000 4158500
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