Question
Abbreviated financial statements for Archimedes Levers are shown in the table below. Assume sales and expenses...
Abbreviated financial statements for Archimedes Levers are shown in the table below. Assume sales and expenses increase by 10% in 2017 and all assets and liabilities increase correspondingly. Also assume no new equity is issued and none is repurchased.
| Income Statement | ||
| Sales | $ | 4,000 |
| Costs, including interest | 3,500 | |
| Net income | $ | 500 |
| Balance Sheet, Year-End | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Net assets | $ | 3,200 | $ | 2,700 | Debt | $ | 1,200 | $ | 1,033 | ||||
| Equity | 2,000 | 1,667 | |||||||||||
| Total | $ | 3,200 | $ | 2,700 | Total | $ | 3,200 | $ | 2,700 | ||||
a. What is the value of the addition to retained earnings for 2017?
Addition to retained earnings $
b. What is the residual dividend for 2017?
Residual dividend $
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