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You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:...

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Finance

You have been given the following information for PattyCake’sAthletic Wear Corp. for the year 2018: Net sales = $39,100,000.Cost of goods sold = $22,260,000. Other operating expenses =$6,800,000. Addition to retained earnings = $1,214,500. Dividendspaid to preferred and common stockholders = $1,953,000. Interestexpense = $1,870,000. The firm’s tax rate is 30 percent. In 2019:Net sales are expected to increase by $10.10 million. Cost of goodssold is expected to be 60 percent of net sales. Depreciation andother operating expenses are expected to be the same as in 2018.Interest expense is expected to be $2,145,000. The tax rate isexpected to be 30 percent of EBT. Dividends paid to preferred andcommon stockholders will not change. Calculate the addition toretained earnings expected in 2019.

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2018Gross profit Net sales Cost of goods soldGross profit 39100000 22260000Gross profit 16840000Earnings after tax Additions to retained    See Answer
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