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    The document provides simplified current and projected financial statements for Judd Enterprises, including income statements and balance sheets. It also includes a question asking for Judd's projected retained earnings. The question is answered by calculating the dividend payout ratio from the projected income statement, determining the retention ratio, and then calculating projected retained earnings as the product of projected net income and the retention ratio, added to current retained earnings on the balance sheet. The projected retained earnings is $377.

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    Additional financing needs

    Original Title

    AFN

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    The document provides simplified current and projected financial statements for Judd Enterprises, including income statements and balance sheets. It also includes a question asking for Judd's projected retained earnings. The question is answered by calculating the dividend payout ratio from the projected income statement, determining the retention ratio, and then calculating projected retained earnings as the product of projected net income and the retention ratio, added to current retained earnings on the balance sheet. The projected retained earnings is $377.

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    53 views2 pages

    Finance Questions

    Uploaded by

    _payal_
    The document provides simplified current and projected financial statements for Judd Enterprises, including income statements and balance sheets. It also includes a question asking for Judd's projected retained earnings. The question is answered by calculating the dividend payout ratio from the projected income statement, determining the retention ratio, and then calculating projected retained earnings as the product of projected net income and the retention ratio, added to current retained earnings on the balance sheet. The projected retained earnings is $377.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Finance Questions

    Question 1

    Judd Enterprises  
    These are the simplified financial statements for Judd Enterprises.
    Income Current Projected      
    statement
    Sales na 1,000      
    Costs na     720      
    Profit before tax na 280      
    Taxes (25%) na       70      
    Net income Na 210      
    Dividends Na 63      
               
    Balance sheets Current Projected     Curren
    Current assets 10 115 Current 70
    0 liabilities
    Net fixed assets 90 1,080   Long-term debt 400
    0
            Common stock 300
            Retained 230
    earnings

    Refer to the Judd Enterprises financial statements. What is Judd's projected


    retained earnings under this plan?
    a. $377
    b. $415
    c. $440
    d. $396
    e. $339
    Dividend payout ratio=dividend/ net income
    =63/210
    =30%
    Retention ratio = 1-dividend payout ratio
    =1-0.3
    =0.7
    Projected retained earnings =projected net income*retention ratio
    =$210*0.7
    =$147
    Total Retained earnings in projected balance sheet will be=$230+$147
    =$377

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