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Those in red are considered to be wrong but i dont understand why. can you help me with the correct answers? The most recent financial
Those in red are considered to be wrong but i dont understand why. can you help me with the correct answers?
The most recent financial statements for Scott, Inc., appear below. Interest expense will emain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- Equity ratio is held constant. SCOTT, INC. 2019 Income Statement Sales $764.000 Costs 620.000 Other expenses 29.500 Earnings before interest $ 114.500 and taxes Interest expense 14.400 Taxable income $ 100,100 Taxes (21%) 21,021 Net income $ 79,079 Dividends Addition to retained Earnings $36,540 42,539 SCOTT, INC. Balance Sheet as of December 31, 2019 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 25,340 Accounts payable $ 61,800 Accounts receivable 34.770 Notes payable 17.900 Inventory 71,510 Total $ 79,700 Total $ 112,000 $ 131.620 Long-term debt Owners' equity Common stock and paid-in surplus $ 221,000 Retained earnings Fixed assets Net plant and equipment $ 107.000 53.920 $ 160.920 Total Total liabilities and owners' equity Total assets $352.620 $352,620 Complete the pro forma income statements below. (Do not round Intermediate calculations. Round your answers to the nearest whole dollar amount.) Sales Costs Other expenses EBIT Interest expense Taxable income Taxes (21%) Answer is complete but not entirely correct. Pro Forma Income Statement 10% Sales Growth 15% Sales Growth 40% Sales Growth IS 840,400 IS 878,000 $ 1.000.000 681.884 712,826 867.538 32,450 33.925 41,298 S 126,066 IS 131,849 Xs 160.768 X 14,400 14,400 14,400 s 111,666 $ 117,449 x $ 146,368 X 23,450 % 24,664 X 30.737 X
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