Consider the following simplified financial statements for the Fire Corporation
ID: 2821629 • Letter: C
Question
Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes):
Income Statement
Sales
$35384
Costs
$24645
Balance Sheet
Assets
$51380
Debt
$36471
Equity
?
The company has predicted a sales increase of 9 percent. It has predicted that every item on the balance sheet will increase by 9 percent as well.
How much dividends should be paid to reconcile the pro forma balance sheet?
(Omit the "$" sign and commas in your response. Enter your answer rounded to 2 decimal places. For example, $1,200.456 should be entered as 1200.46.)
Income Statement
Sales
$35384
Costs
$24645
Explanation / Answer
income = 35384-24645 = 10739 c equity = 51380-36471 = 14909 a There is an increase of 9% on all ietms sales = 35384*1.09 = 38568.56 costs= 24645*1.09 = 26863.05 net income = 11705.51 d assets 51380*1.09 = 56004.2 Debt 36471*1.09 = 39753.39 equity 14909*1.09 = 16250.81 b increase in equity= b-a 1341.81 e Dividends paid = d-e 10363.7 Ans: 10363.70