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 total dividends and the addition to retained earnings is $7,950,000 and $2,3850,000 respectively.

Explanation:

Income statement : It is a statement which shows an income after deducting all expenses, taxes, interest and depreciation.

where,

Operating costs = 85% of sales

                           = 85% × $455,000,000

                          = $386,750,000

Depreciation = 10% of net fixed assets

                      = 10% × $67,000,000

                      = $6,700,000.00

Tax rate is applied on remaining balance

And,

EBITDA = Earning before interest, tax, depreciation and amortization

EBIT = Earning before interest and tax

EBT = Earning Before tax

Kindly find the attachment sheet in which the income statement is constructed.

The dividend is = 25 % of net income

                          = 25% × $31,800,000

                          = $7,950,000

Retained earning = Net income - dividend

                             = 31,800,000 - $7,950,000

                             = $2,3850,000

Hence, the total dividends and the addition to retained earnings is $7,950,000 and $2,3850,000 respectively.

the answer is: guns or butter

hope i

-lavira : )

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.