The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $75,500 Current assets $ 21,000 Long-term debt $ 54,000 Costs 59,400 Fixed assets 148,000 Equity 115,000 Taxableincome $ 16, 100 Total $ 169,000 Total $ 169,000 Taxes (22%) 3,542 Net income $ 12,558 Assets and costs areproportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt - equityratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not roundintermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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Answered: The most recent financial statements…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The most recent financial statements for Anderson Company are shown here: Income Statement Balance Sheet Sales Costs $ 58,800 Current assets $ 28,800 24,800 Fixed assets 123,000 Long-term debt Equity $ 62,600 89,200 Taxable income $ 34,000 Total $151,800 Total $151,800 Taxes (21%) 7,140 Net income $ 26,860 Assets and costs are proportional to sales. Long-term debt and equity are not. The company maintains a constant 30 percent dividend payout ratio and a constant debt- equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Maximum increase in sales
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