Consider the following income statement for the Heir Jordan Corporation: ...
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Finance
Consider the following income statement for the Heir Jordan Corporation:
HEIR JORDAN CORPORATION Income Statement
Sales
$
42,000
Costs
33,000
Taxable income
$
9,000
Taxes (30%)
2,700
Net income
$
6,300
Dividends
$
1,500
Addition to retained earnings
4,800
The projected sales growth rate is 15 percent.
Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all amounts as positive values. Do not round intermediate calculations.)
HEIR JORDAN CORPORATION Pro Forma Income Statement
Sales
$
Costs
Taxable income
$
Taxes
Net income
$
What is the projected addition to retained earnings? (Do not round intermediate calculations.)
Addition to retained earnings
$
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