a. The 2016 sales of Cumberland Industries were $455,000,000; operating costs (excluding depreciation) were equal to 85% of sales; net fixed assets were $67,000,000; depreciation amounted to 10% of net fixed assets; interest expenses were $8,550,000; the state-plus-federal corporate tax rate was 40%; and Cumberland paid 25% of its net income out in dividends. Given this information, construct Cumberland's 2016 income statement. Also calculate total dividends and the addition to retained earnings. (Hint: Start with the partial model in the file and report all dollar figures in thousands to reduce clutter.)

b. The partial balance sheets of Cumberland Industries are shown here. Cumberland issued $10,000,000 of new common stock in 2016. Using this information and the results from Part a, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.

Cumberland Industries: Balance Sheets as of December 31

(Thousands of Dollars)

Cumberland Industries: Balance Sheets as of December 31

(Thousands of Dollars)

2016 2015

Assets

Cash.....................................................$ 91,450........$ 74,625

Short-term investments.................................11,400..........15,100

Accounts receivable....................................108,470..........85,527

Inventories................................................38,450..........34,982

Total current assets...................................$249,770.......$210,234

Net fixed assets..........................................67,000..........42,436

Total assets............................................$316,770.......$252,670

Liabilities and Equity

Accounts payable.....................................$ 30,761........$ 23,109

Accruals...................................................30,405.........22,656

Notes payable............................................12,717.........14,217

Total current liabilities...............................$ 73,883........$ 59,982

Long-term debt..........................................80,263..........63,914

Total liabilities.....................................$154,146........$123,896

Common stock..............................................?...........$ 90,000

Retained earnings...........................................?.............38,774

Total common equity .......................................?.........$128,774

Total liabilities and equity.................................? ......$252,670

c. Construct the statement of cash flows for 2016.