Question
Problem 2-38 Income Statement (LG2-1) You have been given the following information for PattyCakes Athletic Wear Corp. for the year 2021: Net sales = $39,100,000.
Problem 2-38 Income Statement (LG2-1)
You have been given the following information for PattyCakes Athletic Wear Corp. for the year 2021:
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Net sales = $39,100,000.
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Cost of goods sold = $22,260,000.
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Other operating expenses = $6,800,000.
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Addition to retained earnings = $1,214,500.
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Dividends paid to preferred and common stockholders = $1,953,000.
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Interest expense = $1,870,000.
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The firms tax rate is 30 percent.
In 2022:
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Net sales are expected to increase by $10.10 million.
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Cost of goods sold is expected to be 60 percent of net sales.
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Depreciation and other operating expenses are expected to be the same as in 2021.
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Interest expense is expected to be $2,145,000.
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The tax rate is expected to be 30 percent of EBT.
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Dividends paid to preferred and common stockholders will not change.
Calculate the addition to retained earnings expected in 2022. (Enter your answer in dollars, not millions.)
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