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  3. 4. based on the information in the table below: a.

4. Based on the information in the table below: a. Prepare an income statement for...

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4. Based on the information in the table below: a. Prepare an income statement for Windswept Woodworks, Inc. for year 2. Assume that the company pays a flat tax rate of 34% on its taxable income. b. Calculate Windswept Woodworks' ROE for year 2. C. Calculate the following items for Windswept Woodworks for year 2 and verify your answe part b using Dupont Identity. Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Year 1 Accounts payable 484 424 Accounts receivable 1,328 870 Accumulated depreciation 6,794 6,672 Cash & equivalents 272 168 Common stock 1,232 1,160 Cost of goods sold 1,500 n.a. Depreciation expense ? n.a. Common stock dividends paid ? n.a. Interest expense 140 n.a. Inventory 1,062 1,066 Addition to retained earnings 602 n.a. Long-term debt 860 776 Notes payable 230 380 Gross plant & equipment 10,260 10,000 Retained earnings 3,110 2,516 Sales 3,018 n.a. Other current liabilities 116 96 Tax rate 34% n.a. Market price per share - year end $ 19.80 $ 17.50 Number of shares outstanding 500 million 500 million 34

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