PRACTICE PROBLEMS (F21) Problem 4-25 Capacity Usage and Growth (LO2) - Do not sell fixed assets The most recent financial statements for Crosby Incorporated, follow. Sales for 2021 are projected to grow by 20 percent. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales 750,000 Costs 585,000 Other expenses 21.000 Earnings before interest and taxes $ 144,000 Interest pald 17,000 Taxable income $ 127,000 Taxes (22%) 27.940 Net Income $ 99,060 Dividends $ 29718 Addition to retained earnings 69.342 CROSBY, INCORPORATED Balance Sheetos of December 31, 2020 Assets Uabilities and Owners' Equity Current assets Current liabilities Cash $ 20,940 Accounts payable Accounts receivable 43,880 Notes payable $ 55100 14.300 94.960 Total $69.400 Inventory Total $ 159,780 Long-term debt $ 133.000 Fixed assets Net plant and equipment $426,000 Owners' equity Common stock and paid in surplus $ 116,000 Retained earnings 267,380 YA 2920