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    Retained Earnings Exercises

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    1. ABC company had sales of $100,000, operating costs of $10,000, depreciation of $5,000. It has $20,000 of bonds outstanding carrying an interest rate of 8%. If the tax rate is 35%, compute the net income.
    2. ABC company had CA of $18,000 and CL of $10,000. If the long term debt and equity was $20,000 and $30,000 respectively, compute the net fixed assets.
    3. ABC has current assets of $2,170, net fixed assets of $9,300, current liabilities of $1,350, and long-term debt of $3,980. What is the amount of equity? what is the net working capital?

    1. An analyst has collected the following information regarding a company in advance of its year-end earnings announcement (in millions): Estimated Net Income: $200, Beginning Retained Earnings: $1400, and Estimated dividends paid to owners: $100. What should be the ending retained earnings?
    2. In its most recent financial statements, NewHouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous period's retained earnings were $780 million. How much dividends were paid to shareholders during the year?
    3. Computer World Inc. paid out $22.5 million in dividends and reported $278.9 million of retained earnings at the year-end. The prior year's retained earnings were $212.3 million. What is the net income?

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    Solution Summary

    The post includes 6 answers to accounting questions pertaining to financial statement analysis and retained earnings. Calculations for dividends, net income, net fixed assets, and equity are included.

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