Question

Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes):

Income Statement
Sales	$35384
Costs	$24645

Balance Sheet
Assets	$51380	Debt	$36471
		Equity	?

The company has predicted a sales increase of 9 percent. It has predicted that every item on the balance sheet will increase by 9 percent as well.

How much dividends should be paid to reconcile the pro forma balance sheet?

(Omit the "$" sign and commas in your response. Enter your answer rounded to 2 decimal places. For example, $1,200.456 should be entered as 1200.46.)

Answer 1

income =	35384-24645	=	10739	c
equity =	51380-36471	=	14909	a
There is an increase of		9%	on	all ietms
sales =	35384*1.09	=	38568.56
costs=	24645*1.09	=	26863.05
net income		=	11705.51	d
assets	51380*1.09	=	56004.2
Debt	36471*1.09	=	39753.39
equity	14909*1.09	=	16250.81	b
increase in equity=		b-a	1341.81	e
Dividends paid =		d-e	10363.7
Ans:	10363.70