Reference no: EM131571701

You are preparing a forecast for next year of the amount that will be added to retained earnings. You have pulled together the following information;

Revenues are expected to be $100,000, and operating expenses will be $40,000. You expect to pay interest of $10,000 on a loan. The company is planning to sell a piece of equipment that originally cost $4000 4 years ago. The current book value is $2000, and the sale price is $5000. The company owns stock in a subsidiary (75%) and expects to receive a dividend of $2000. It also loaned the subsidiary money, and expects to receive interest of $5000. Plans are to pay a $6000 dividend to the stockholders this year. Ordinary income tax rates are 40%, while capital gains rates are 20%.

Could someone please help me outline a simple income statement showing this information, and show the amount that will be added to (or reduced from) Retained Earnings for the year?