Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

unsure where I went wrong. did I have a rounding error? Return to question Problem 2-37 Income Statement (LG2-1) Listed below is the 2021 income

image text in transcribed
unsure where I went wrong.
image text in transcribed
did I have a rounding error?
Return to 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 $18.600 Less: Cost of goods sold 8.500 Gross profits $10.100 Less: Other operating expenses 3.900 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 6.200 Less: Depreciation 3.300 Earnings before interest and taxes (EBIT) $ 2.900 Lesst Interest 0.815 Earnings before taxes (EBT) $ 2.085 Lessi Taxes 0.438 Net Income $ 1.647 The CEO of Tom and Sue's wants the company to earn a net income of $2.950 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 $1.281 million, and the firm's tax rate will be 21 percent Calculate the net sales needed to produce net income of $2.950 million (Enter your answer in millions of dollars rounded to 3 decimal places.) Answer is complete but not entirely correct. Net sales IS 30.538 milion het sales heeded to produce 2.45mic in net income Profit before tax : profit after tax / (1- tax Rate) 2.95 mil/11--21) - Bloengsaan yang ada sesuai Klimaan. 3734,177.215 5.015 million Profit before intrest & tax 3.734 t 1.241 7 intrest in cressed to this siven inprobiem. gross profit i Profit before text Intrest + Dep. t orereting expense =5.015+ 3.300+ 3.400 = 12.215 milion het sales i gross Profit/(1-.60) 12.215/(1-.6) = 30.537

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

9th Edition

978-0470317549, 9780470387085, 047031754X, 470387084, 978-0470533475

Students also viewed these Finance questions