Net sales Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses Operating incomer(or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (25%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings Year 1 $20,000,000 14,000,000 800,000 $5,200,000 520,000 4,680,000 1,170,000 $3,510,000 200,000 3,310,000 1,053,000 $2,257,000 Year 2 (Forecasted) $25,000,000 17,500,000 800,000 $ • Cute Camel's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. $ 200,000 1,281,375 $2,789,875 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. in Year 1 to . It is to say that Cute Camel's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,257,000 and $2,789,875, respectively. This is because of the items reported in the income statement Involve payments and receipts of cash.
Net sales Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses Operating incomer(or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (25%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings Year 1 $20,000,000 14,000,000 800,000 $5,200,000 520,000 4,680,000 1,170,000 $3,510,000 200,000 3,310,000 1,053,000 $2,257,000 Year 2 (Forecasted) $25,000,000 17,500,000 800,000 $ • Cute Camel's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. $ 200,000 1,281,375 $2,789,875 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. in Year 1 to . It is to say that Cute Camel's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,257,000 and $2,789,875, respectively. This is because of the items reported in the income statement Involve payments and receipts of cash.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter3: Accrual Accounting
Section: Chapter Questions
Problem 1MCQ: Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a...
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