Consider Brighton’s results for Year 0 (see excel click here). The sales forecast for Year 1 is given in excel. In addition, Brighton plans on paying dividends of $20,000 in Year 1, they have 40,000 shares of common stock outstanding and for simplification, assume their tax expense is 35% of EBT. For Year 1, forecast Brighton’s:

EPS is $5.36 per share

Retained Earning is $1,294,500

Explanation:

Financial Statement section of this question is missing which is attached with this answer. This answer is made according to attached data, Please find that.

Number of Shares = 40,000

Earning Per share = Net Income / Number of Shares

Earning Per share = 214,500 / 40,000 = $5.36 per share

Retained Earning = 1,100,000.00 + 214,500.00 - 20,000.00 = 1,294,500

                           Income Statement

Year                                            0                           1

Sales                          1,000,000.001,200,000.00

Variable Expenses         (600,000.00)          (720,000.00)

Contribution Margin400,000.00           480,000.00

Fixed Expenses         (150,000.00)          (150,000.00)  

Operating Income         250,000.00           330,000.00

Nonrecurring Gain           75,000.00          

Tax Expense                 (113,750.00)            (115,500.00)

Net Income                  211,250.00               214,500.00

the third answer is correct.