.3- Euro Designs, Inc. Sales to increase in 2016 from the 2015 level of $ 3.5 million to $ 3.9 million. Due to large loan repayment, interest expense is expected to decrease in 2016 to $ 325,000. The company plans to increase its cash dividend payments from 2016 to $ 320,000. Below is the income statement for the end of 2015.
Euro Designs, Inc., Income Statement for the
Year Ended December 31, 2015
Sales revenue
$3,500,000
Less: Cost of goods sold
1,925,000
Gross profits
$1,575,000
Less: Operating expenses
420,000
Operating profits
$1,155,000
Less: Interest expense
400,000
Net profits before taxes
$ 755,000
Less: Taxes (rate = 40%)
302,000
Net profits after taxes
$ 453,000
Less: Cash dividends
250,000
To retained earnings
$ 203,000
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here