You Have Been Given the Following Information for Halle's Holiday

question 75

Multiple Choice

You have been given the following information for Halle's Holiday Store Corp. for the year 2017: Net sales = $50,000,000; Cost of goods sold = $35,000,000; Addition to retained earnings = $2,000,000; Dividends paid to preferred and common stockholders = $3,000,000; Interest expense = $3,000,000. The firm's tax rate is 30 percent. In 2018, net sales are expected to increase by $5 million, cost of goods sold is expected to be 65 percent of net sales, expensed depreciation is expected to be the same as in 2017, interest expense is expected to be $2,500,000, the tax rate is expected to be 30 percent of EBT, and dividends paid to preferred and common stockholders will not change. What is the addition to retained earnings expected in 2018?

• A) $2,000,000
• B) $5,325,000
• C) $8,447,500
• D) $10,304,643

---

Definitions:

Age-Appropriate Motor Skills

The physical abilities that a person is expected to display at a specific age, such as crawling in infants or walking in toddlers.

Toddler

A young child, especially one who is learning or has recently learned to walk, typically aged between one and three years old.

Blood Pressure

The force of circulating blood on the walls of the arteries, often measured as an indicator of cardiovascular health.

School-Age Child

A developmental stage referring to children who are attending elementary school, generally ages 6-12 years.