Problem 2 37 Income Statement (LG2 1) Listed below is the 2021 income statement for Tom and Sue Travels, Inc TOM AND SUE TRAVELS, INC Income Statement for Year Ending December 31, 2021 (in millions of dollars) Net sales $ 17 000 Less Cost of goods sold 7 700 Gross profits $ 9 300 Less Other operating expenses 3 500 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 5 800 Less Depreciation 2 500 Earnings before interest and taxes (EBIT) $ 3 300 Less Interest 0 775 Earnings before taxes (EBT) $ 2 525 Less Taxes 0 530 Net income $ 1 995 The CEO of Tom and Sues wants the company to earn a net income of $2 550 million in 2022 Cost of goods sold is expected to be 50 percent of net sales, depreciation and other operating expenses are not expected to change, interest expense is expected to increase to $1 241 million, and the firms tax rate will be 21 percent Calculate the net sales needed to produce net income of $2 550 million (Enter your answer in millions of dollars rounded to 3 decimal places )

Question

Problem 2 37 Income Statement (LG2 1) Listed below is the 2021 income statement for Tom and Sue Travels, Inc  TOM AND SUE TRAVELS, INC  Income Statement for Year Ending December 31, 2021 (in millions of dollars) Net sales $ 17 000 Less  Cost of goods sold 7 700 Gross profits $ 9 300 Less  Other operating expenses 3 500 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 5 800 Less  Depreciation 2 500 Earnings before interest and taxes (EBIT) $ 3 300 Less  Interest 0 775 Earnings before taxes (EBT) $ 2 525 Less  Taxes 0 530 Net income $ 1 995 The CEO of Tom and Sues wants the company to earn a net income of $2 550 million in 2022  Cost of goods sold is expected to be 50 percent of net sales, depreciation and other operating expenses are not expected to change, interest expense is expected to increase to $1 241 million, and the firms tax rate will be 21 percent  Calculate the net sales needed to produce net income of $2 550 million  (Enter your answer in millions of dollars rounded to 3 decimal places )

Accepted Answer

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TOM AND SUE TRAVELS, INC.
Income Statement for Year Ending December 31, 2021
(in millions of dollars)
Net sales	$	17.000
Less: Cost of goods sold		7.700
Gross profits	$	9.300
Less: Other operating expenses		3.500
Earnings before interest, taxes, depreciation, and amortization (EBITDA)	$	5.800
Less: Depreciation		2.500
Earnings before interest and taxes (EBIT)	$	3.300
Less: Interest		0.775
Earnings before taxes (EBT)	$	2.525
Less: Taxes		0.530
Net income	$	1.995

Question

Problem 2-37 Income Statement (LG2-1) Listed below is the 2021 income statement for Tom and Sue Travels, Inc. TOM AND SUE TRAVELS, INC. Income Statement

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