Dividends and net income
Not what you're looking for?
Use the following information and the percent-of-sales method to answer questions.
Below is the 2004 year-end balance sheet for Banner, Inc. Sales for 2004 were $1,600,000 and are expected to be $2,000,000 during 2005. In addition, we know that Banner plans to pay $90,000 in 2005 dividends and expects projected net income of 4% of sales.
For consistency with the Answer selections provided, please round your forecast percentages to two decimals.)
Banner, Inc. Balance Sheet
December 31, 2004
Assets
Current assets $890,000
Net fixed assets 1,000,000
Total
$1,890,000
Liabilities and Owners' Equity
Accounts payable $160,000
Accrued expenses 100,000
Notes payable 700,000
Long-term debt 300,000
Total liabilities 1,260,000
Common stock (plus paid-in capital) 360,000
Retained earnings 270,000
Common equity 630,000
Total $1,890,000
Banner's projected current assets for 2005 are:
(A) $1,000,000.
(B) $1,120,000
(C) $1,500,000
(D) $1,260,000.
Banner's projected accounts payable balance for 2005 is:
(A) $160,000.
(B) $120,000
(C) $200,000
(D) $300,000
Banner's projected retained earnings for 2005 are:
(A) $260,000.
(B) $280,000
(C) $340,000
(D) $350,000
Purchase this Solution
Solution Summary
Solution shows answes of multiple choice questions.
Solution Preview
Hi,
Please see the response to your posting as below:
A)
Current assets as a percentage to sales = current assets at the end of 2004 /sales of 2004 =$890,000//1,600,000=0.55625 = ...
Purchase this Solution
Free BrainMass Quizzes
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Operations Management
This quiz tests a student's knowledge about Operations Management