Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION
Income Statement Sales $ 43,500 Costs 34,100 Taxable income $ 9,400 Taxes (24%) 2,256 Net income $ 7,144 Dividends $ 3,000 Addition to retained earnings 4,144
The projected sales growth rate is 15 percent.
Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant.
What is the projected addition to retained earnings? Sales Costs Taxable income Taxes Net Income