Screen shot of question : Here are the abbreviated financial statements for Plan

Question

Screen shot of question :

Here are the abbreviated financial statements for Planners Peanuts:

If sales increase by 20% in 2013 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 20%).

The balancing item is (Click to select)debt OR sales OR dividends OR net income OR cost. If net income next year is $ ___and equity increases by $___, then (Click to select)net income OR debt OR dividends OR cost OR sales must be ____$.

Here are the abbreviated financial statements for Planners Peanuts:

Explanation / Answer

INCOME STATEMENT, 2012

INCOME STATEMENT, 2013

BALANCE SHEET, YEAR-END

INCOME STATEMENT, 2012

INCOME STATEMENT, 2013

  Sales 8,500   Sales 10,200   Cost 6,700   Cost 8,040   Net income 1,800   Net income 2,160

BALANCE SHEET, YEAR-END

2011 2012 2013 2011 2012 2013   Assets          5,500 10,800          12,960   Debt 853 1,000            1,200   Equity 4,647 9,800          11,760   Total          5,500 10,800          12,960   Total 5,500 10,800          12,960 The balancing Item is dividend If the Net income next year is $2,160 and equity increases by $1,960, then Dividend must be $200

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