Seeking help on accounting problem below..

Jul 18th, 2015
SKTFaker
Category:
Accounting
Price: $30 USD

Question description

assignment.docx 

Please see attached file above.

Hi Folks,

See attached. This is an exercise in constructing a P&L from info provided. It involves determining various line-items based on A/R DSO, Inventory MOH, A/P Days, etc. info. 

NOTE: The NIBT amount (Net Income Before Tax) can be determined by dividing NIAT by (1-tax rate % as a decimal). For example, if NIAT is $250,000 and the tax rate is 38%, the NIBT would be:

NIBT = NIAT/(1 - 0.38) = $250,000/0.62 = $403,226.

The Expenses can be calculated as the difference between GP & NIBT.

Try this & let me know if you have any questions.

Ken

Construct a 2013 P&L for a company with the following data and calculate eps: (NOTE: eps is NIAT “available to common shareholders” divided ny share quantity.

Retained Earnings 12/31/12  $1,250,000

Retained earnings 12/31/13    1,600,000

A/R 12/31/13    1,250,000 (60 days DSO)

Inventory 12/31/13    1,500,000 (4 months-on-hand)

A/P 12/31/13    562,500 (45 days)

Net Profit Margin    10%

Tax Rate    30%

Preferred Dividend 2013  $100,000

Common Dividend  $300,000

Common Stock    325,000 shares 

Complete all line items:

Sales

COGS

Gross Profit (GP)

GP%

Expenses

NIBT

Tax

NIAT

EPS

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