6- Consider the following financial statements (in millions of TL). What would be the retained earnings for the year 2016? Balance Sheet (2016) Income Statement (2016) Credit Sales Cost of Goods Sold (800) Taxable Income 1.000 Cash 160 Accounts Payable Accounts Receivable 440 Short-Term Debt 600 Long-Term Debt 1.800 Common Stock 300 100 800 800 Retained Eamings 1.000 3.000 ? Inventory Fixed Assets Taxes (34%) Net Income Total 3.000 Total Dividend (33.33%) Retained Earnings ? Main assumptions Sales are expected to increase by 25% in 2017. "Cost of goods sold" is a fraction of sales in the income statement. All other items are independent of sales. Each current asset and accounts payable are fractions of sales in the balance sheet All other items are independent of sales. If there is a need for external funding: o raise funds through short term debt first, but current ratio must not be smaller than 3. o raise the remaining funds through 50% long-term debt and 50% equity offering (common stock). I toin O 200 O 88 O 44 132

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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6- Consider the following financial statements (in millions of TL). What would be
the retained earnings for the year 2016?
Balance Sheet (2016)
Income Statement (2016)
Credit Sales
Cost of Goods Sold (800)
Taxable Income
1.000
Cash
160 Accounts Payable
Accounts Receivable 440 Short-Term Debt
600 Long-Term Debt
1.800 Common Stock
300
100
800
800
Retained Earnings 1.000
3.000
Inventory
Fixed Assets
Taxes (34%)
Net Income
Total
3.000 Total
Dividend (33.33%)
Retained Earnings
Main assumptions
Sales are expected to increase by 25% in 2017.
"Cost of goods sold" is a fraction of sales in the income statement. All other items are independent
of sales.
Each current asset and accounts payable are fractions of sales in the balance sheet. All other
items are independent of sales.
If there is a need for external funding:
o raise funds through short term debt first, but current ratio must not be smaller than 3.
o raise the remaining funds through 50% long-term debt and 50% equity offering (common
stock).
200
88
44
132
Transcribed Image Text:6- Consider the following financial statements (in millions of TL). What would be the retained earnings for the year 2016? Balance Sheet (2016) Income Statement (2016) Credit Sales Cost of Goods Sold (800) Taxable Income 1.000 Cash 160 Accounts Payable Accounts Receivable 440 Short-Term Debt 600 Long-Term Debt 1.800 Common Stock 300 100 800 800 Retained Earnings 1.000 3.000 Inventory Fixed Assets Taxes (34%) Net Income Total 3.000 Total Dividend (33.33%) Retained Earnings Main assumptions Sales are expected to increase by 25% in 2017. "Cost of goods sold" is a fraction of sales in the income statement. All other items are independent of sales. Each current asset and accounts payable are fractions of sales in the balance sheet. All other items are independent of sales. If there is a need for external funding: o raise funds through short term debt first, but current ratio must not be smaller than 3. o raise the remaining funds through 50% long-term debt and 50% equity offering (common stock). 200 88 44 132
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