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Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To

Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section.
DATA
Sales $400,000
Cost of goods sold 112,000
Operating expenses 130,000
Increase in retained earnings 58,000
Common stock outstanding 22,000 shares
Dividend per share $1.60
Tax rate 21%
SOLUTION
a. Assuming the firms earnings are taxed at 21 percent, construct the firms income statement.
Income Statement:
Net sales $400,000
Cost of goods sold 112,000
Gross profit $288,000
Operating expenses 130,000
Operating income $158,000
Interest expense
Income before taxes
Tax 0
Net income -$176,000
b. Compute the firms operating profit margin.
Operating profit margin
c. What was the times interest earned?
Times interest earned
(Q#4,4-3)

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