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.
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What is the projected addition to retained earnings? Sales Costs Taxable income Taxes Net Income