Problem 2-30 Income Statement (LG1)
The following information for Kellygirl’s Athletic Wear Corp. for the year 2008:a.Net sales = $23,200,000.b.Cost of goods sold = $14,700,000.c.Addition to retained earnings = $1,375,000.d.Dividends paid to preferred and common stockholders = $1,225,000.e.Interest expense = $1,175,000.f.The firm’s tax rate is 30 percent.g.In 2009, net sales are expected to increase by $3.9million.h.Cost of goods sold is expected to be 60 percent of net sales.i.Expensed depreciation is expected to be the same as in 2008.j.Interest expense is expected to be $1,250,000.k.The tax rate is expected to be 30 percent of EBT.l.Dividends paid to preferred and common stock holders will not change.Calculate the addition to retained earnings expected in 2009. (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the “$” sign in your response.)
