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Assignment help 5971

by | Jun 24, 2023 | Posted Assignments

Use the following information and the percent-of-sales method to answer the following questions(s).

Below is the 2014 year-end balance sheet for Banner, Inc. Sales for 2014 were $1,600,000 and are expected to be $2,000,000 during 2015. In addition, we know that Banner plans to pay $90,000 in 2015 dividends and expects projected net income of 4% of sales. (For consistency with the Answer selections provided, round your forecast percentages to two decimals).

Banner, Inc. Balance Sheet

December 31, 2014

Assets

Current assets $890,000

Net fixed assets 1,000,000

Total $1,890,000

Liabilities and Owners’ Equity

Accounts Payable $160,000

Accounts Expense $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 project retained earnings for 2015 are:

$340,000

$260,000

$280,000

$350,000

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