Cumberland Solution with work Shown in Excel

Cumberland Solution with work Shown in Excel

 
 

a. Cumberland Industries most recent sales were $455,000,000; operating costs (excluding depreciation) were equal to 85% of sales; net fixed assets were $67,000,000; depreciation amounted to 10% of net fixed assets; interest expenses were $8,550,000; the state-plus-federal corporate tax rate was 40% and Cumberland paid 25% of its net income out in dividends. Given this information, construct Cumberland’s income statement. Also calculate total dividends and the addition to retained earnings.

The input information required for the problem is outlined in the “Key Input Data” section below. Using this data and the balance sheet above, we constructed the income statement shown below.

Key Input Data for Cumberland Industries 2010
(Thousands of dollars)
Sales Revenue                                                                  $455,000
Expenses (excluding depreciation) as a percent of sales             85.0%
Net fixed assest                                                                  $67,000
Depr. as a % of net fixed assets                              0.0%
Tax rate                                                                                         40.0%
Interest expense                                                                   $8,550
Dividend Payout Ratio                                                    25%

b. Cumberland Industries’ partial balance sheets are shown below. Cumberland issued $10,000,000 of new common stock in the most recent year. Using this information and the results from part a, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.c. Construct the statement of cash flows for the most recent year.