Income Statement You have been given the following information for Nicole\'s Nec

Question

Income Statement You have been given the following information for Nicole's Neckties Corp.: net sales = $2,500, 000; cost of goods sold = $1,300, 000; addition to retained earnings = $30, 000; dividends paid to preferred and common stockholders = $300, 000; interest expense = $50, 000. The firm's tax rate is 40 percent. What is the depreciation expense for Nicole's Neckties Corp.? $550, 000 $600, 000 $650, 000 $820, 000 On which of the four major financial statements would you find net plant and equipment? Balance Sheet Income Statement Statement of Cash Flows Statement of Retained Earnings Future Value of Multiple Annuities Assume that you contribute $200 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $400 per month for another 25 years. Given a 5 percent interest rate, what is the value of your retirement plan after 40 years? $424,305.97 $24,159.95 $28,475.66

Explanation / Answer

Question 1 Income Statement Net sales 2500000 Cost of goods sales 1300000 Gross profit 1200000 Depreciation 600000 (1200000-600000) EBIT 600000 interest Expenses 50000 Given Net profit before tax 550000 (330000/0.6 Tax Expense @ 40% 220000 (550000*0.4) Net Income after tax 330000 dividend 300000 Retianed earnings 30000 Ans is 2 $600000 Question 2 Ans is 1 Balance sheet Question 3 Fv of annuities 1 $53,457.79 FV(5%/12,180,200) Fv after 25 yrs of Fv1                      186,102.09 Fv of annuities2 $238,203.88 FV(5%/12,300,400) Total value of retirement plan 186102.09+238203.88 $                  424,305.97 Ans is 1 $424305.97

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