Judd Enterprises
These Are the Simplified Financial Statements for Judd

question 27

Multiple Choice

Judd Enterprises
These are the simplified financial statements for Judd
Enterprises.
$\begin{array} { l r r } \text { Income statement } & \text { Current } & \text { Frojected } \\ \text { Sales } & \text { na } & 1,000 \\ \text { Costs } & \text { na } & \underline{720 }\\ \text { Profit before tax } & \text { na } & 280 \\ \text { Taxes } ( 25 \% ) & \text { na } & 70 \\ \text { Net income } & \text { na } & 210 \\ \text { Dividends } & \text { na } & 63 \end{array}$

$\begin{array} { l r r r r r } \text { Balance sheets } & \text { Current } & \text { Projected } && \text { Current } & \text { Projected } \\ \text { Current assets } & 100 & 115 & \text { Current } & 70 & 81 \\ \text { Net fixed assets } & 900 & 1,080& \text { liabilities } & \\ & & & \text { Long-term debt } & 400 \\ & & & \text { Common stock } & 300 \\ & & & \text { Retained } & 230\\&&&\text { earnings } \end{array}$ ?
-Refer to the Judd Enterprises financial statements.What is Judd's projected retained earnings under this plan?

• A) $339
• B) $377
• C) $396
• D) $415
• E) $440

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Definitions:

Break-Even

The point at which total costs and total revenues are equal, meaning that a business or product is neither making a profit nor sustaining a loss.

Sales Dollars

The total revenue generated from the sale of goods or services by a company before any expenses are deducted.

Common Fixed Expenses

Costs that do not change with the level of output or sales, shared across different sections or products of a business.

Break-Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain.