770_Midterm_WInter_2023_Part2_Sharae_Reid.

Sharae Reid
Problem 1 - 30 points
Use the following information to complete the income statement for Company
work):

Income Statement Information
Revenue $ 120,000,000
Gross Margin 56.0%
Selling General and Administrative (SG&A) 21.0%
Research and Development (R&D) 15.0%
Depreciation expense (D&A) $ 5,000,000
Interest Expense $ 5,000,000
Interest Income $ 2,500,000
Tax Rate 21%

Securities Information
Weighted Average Shares (12/31/1X) 10,000,000
A Warrants exercisable @ $2.25 2,500,000
B Warrants exercisable @ $3.00 2,500,000
Stock Price (12/31/1X) $ 5.00

Complete the following Income Statement
Answers go in the yellow boxes
Revenue $ 120,000,000
Cost of Goods Sold 52,800,000
Gross Profit 67,200,000

Operating Expenses
SG&A 25,200,000
R&D 18,000,000
D&A 5,000,000
Operating Expenses Total 48,200,000
Operating Income 19,000,000

Interest Expense, 2,500,000

net Pre Tax Income 16,500,000
Tax 3,465,000

, Net Income $ 13,035,000
EPS Basic $1.30
EPS Diluted $1.05

Total Points
Use this table (below) to help with your
calculations Diluted Share Calculations

Basic 10,000,000
A warrants B warrants Total 2,500,000
2,500,000
Proceeds A warrants B warrants 15,000,000


Total Proceeds Shares repurchased
$ 5,625,000
Diluted shares used to calculate Diluted EPS $ 7,500,000
$ 13,125,000

2,625,000

12,375,000




60
Total Score