The B/S and I/S for Company ABC are below. At the beginning of year 1, all B/S items are zero except for a Factory, that begins year 1 at 200,000. All inventory is sold by the end of each year (EOY), but some sales and some expenses are “on account”. EBT for tax purposes is the same as the EBT on the Income Statement. Corporate taxes are 21%, and are paid in cash at EOY. All cash the company has at EOY is paid as cash dividends to shareholders. Calculate the dividends issued by the company each of the four years. End Of Yr1 EOY 2 EOY 3 EOY 4 Balance Sheet (B/S) Accounts Receivable 5,000 15,000 15,000 10,000 Accounts Payable 4,000 6,000 8,000 10,000 Cash 0 0 0 0 Factory 175,000 150,000 125,000 100,000 Income Statement (I/S) Revenues 190,000 200,000 200,000 200,000 COGS + SG&A (110,000) (90,000) (70,000) (50,000) Depreciation (25,000) (25,000) (25,000) (25,000) EBT 55,000 85,000 105,000 125,000 Taxes (11,550) (17,850) (22,050) (26,250) Net Income 43,450 67,150 82,950 98,750 Dividends issued by ABC: ________ ________ ________ ________
The B/S and I/S for Company ABC are below. At the beginning of year 1, all B/S items are zero except for a Factory, that begins year 1 at 200,000. All inventory is sold by the end of each year (EOY), but some sales and some expenses are “on account”. EBT for tax purposes is the same as the EBT on the Income Statement. Corporate taxes are 21%, and are paid in cash at EOY. All cash the company has at EOY is paid as cash dividends to shareholders. Calculate the dividends issued by the company each of the four years.
|
|
End Of Yr1 |
EOY 2 |
EOY 3 |
EOY 4 |
|
Balance Sheet (B/S) |
|
|
|
|
|
Accounts Receivable |
5,000 |
15,000 |
15,000 |
10,000 |
|
Accounts Payable |
4,000 |
6,000 |
8,000 |
10,000 |
|
Cash |
0 |
0 |
0 |
0 |
|
Factory |
175,000 |
150,000 |
125,000 |
100,000 |
|
|
|
|
|
|
|
Income Statement (I/S) |
|
|
|
|
|
Revenues |
190,000 |
200,000 |
200,000 |
200,000 |
|
COGS + SG&A |
(110,000) |
(90,000) |
(70,000) |
(50,000) |
|
Depreciation |
(25,000) |
(25,000) |
(25,000) |
(25,000) |
|
EBT |
55,000 |
85,000 |
105,000 |
125,000 |
|
|
|
|
|
|
|
Taxes |
(11,550) |
(17,850) |
(22,050) |
(26,250) |
|
Net Income |
43,450 |
67,150 |
82,950 |
98,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends issued by ABC: |
________ |
________ |
________ |
________ |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
