Here are the abbreviated financial statements for Planner's Peanuts: INCOME STATEMENT, 2019 Sales Cost $ 9,000 7,100 Net income $ 1,900 BALANCE SHEET, YEAR-END 2018 Assets $ 6,500 2019 $ 9,500 Total $ 6,500 $ 9,500 Debt Equity Total 2018 $ 853 2019 $1,000 5,647 $6,500 $9,500 8,500 a. If sales increase by 25% In 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the Income and balance sheet also increase by 25%), what must be the balancing item? b. What will be the value of this balancing item? Answer is not complete. a. Balancing item Dividends b. Value
Here are the abbreviated financial statements for Planner's Peanuts: INCOME STATEMENT, 2019 Sales Cost $ 9,000 7,100 Net income $ 1,900 BALANCE SHEET, YEAR-END 2018 Assets $ 6,500 2019 $ 9,500 Total $ 6,500 $ 9,500 Debt Equity Total 2018 $ 853 2019 $1,000 5,647 $6,500 $9,500 8,500 a. If sales increase by 25% In 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the Income and balance sheet also increase by 25%), what must be the balancing item? b. What will be the value of this balancing item? Answer is not complete. a. Balancing item Dividends b. Value
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 83E
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