PROBLEM 7-F BUDGETED NET INCOME Reima Inc. 2016 income statement is presented below. Sales P3,500,00 Operating Costs 2,500,000 Earnings before interest and P1,000,00 taxes Interest expense 200,000...

PROBLEM 7-F BUDGETED NET INCOME<br>Reima Inc. 2016 income statement is presented below.<br>Sales<br>P3,500,00<br>Operating Costs<br>2,500,000<br>Earnings before interest and<br>P1,000,00<br>taxes<br>Interest expense<br>200,000<br>Earnings before taxes<br>P800,000<br>Income tax (40%)<br>320,000<br>Net Income<br>P480,000<br>Dividends (40%)<br>Addition to retained earnings<br>P192,000<br>P288,000<br>For 2017, the firm is forecasting a 40% increase in sales and that its year end operating<br>costs will decline to 60% of sales. Tax rate, interest expense and dividend payout ratio are<br>expected to remain constant.<br>Required:<br>What is the projected 2017 net income?<br>

Extracted text: PROBLEM 7-F BUDGETED NET INCOME Reima Inc. 2016 income statement is presented below. Sales P3,500,00 Operating Costs 2,500,000 Earnings before interest and P1,000,00 taxes Interest expense 200,000 Earnings before taxes P800,000 Income tax (40%) 320,000 Net Income P480,000 Dividends (40%) Addition to retained earnings P192,000 P288,000 For 2017, the firm is forecasting a 40% increase in sales and that its year end operating costs will decline to 60% of sales. Tax rate, interest expense and dividend payout ratio are expected to remain constant. Required: What is the projected 2017 net income?

Jun 07, 2022

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PROBLEM 7-F BUDGETED NET INCOME Reima Inc. 2016 income statement is presented below. Sales P3,500,00 Operating Costs 2,500,000 Earnings before interest and P1,000,00 taxes Interest expense 200,000...

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