EASSY Manufacturing Company presents the following: Statement of Comprehensive Income December 31, 2018 Sales P 480,000 Cost of sales 336,000 Gross profit 144,000 Operating expenses 57,600 86,400 12,960 Income before taxes Income tax (30%) Net income 73,440 Statement of Financial Position December 31, 2018 Current assets P 420,000 Non-current assets 500,000 920,000 Total assets Current liabilities 90,000 250,000 490,000 Non-current liabilities Ordinary shares Retained earnings Total liabilities and shareholders' equity 90,000 P 920,000 Additional information: 1. Dividends payout is 60%. 2. Only current assets and current liabilities are directly related to sales. 3. The business expects a 30% increase in sales next year. 4. The business is expecting to retain 40% of the earning next year. Expected increase in assets Your answer Spontaneous increase in current iabilities.
EASSY Manufacturing Company presents the following: Statement of Comprehensive Income December 31, 2018 Sales P 480,000 Cost of sales 336,000 Gross profit 144,000 Operating expenses 57,600 86,400 12,960 Income before taxes Income tax (30%) Net income 73,440 Statement of Financial Position December 31, 2018 Current assets P 420,000 Non-current assets 500,000 920,000 Total assets Current liabilities 90,000 250,000 490,000 Non-current liabilities Ordinary shares Retained earnings Total liabilities and shareholders' equity 90,000 P 920,000 Additional information: 1. Dividends payout is 60%. 2. Only current assets and current liabilities are directly related to sales. 3. The business expects a 30% increase in sales next year. 4. The business is expecting to retain 40% of the earning next year. Expected increase in assets Your answer Spontaneous increase in current iabilities.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![EASSY Manufacturing Company presents the following:
Statement of Comprehensive Income
December 31, 2018
Sales
480,000
Cost of sales
336,000
Gross profit
Operating expenses
144,000
57,600
Income before taxes
86,400
Income tax (30%)
12,960
73,440
Net income
P
Statement of Financial Position
December 31, 2018
Current assets
420,000
Non-current assets
500,000
Total assets
920,000
Current liabilities
90,000
Non-current liabilities
250,000
490,000
Ordinary shares
Retained earnings
Total liabilities and shareholders' equity
90,000
P
920,000
Additional information:
1. Dividends payout is 60%.
2. Only current assets and current liabilities are directly related to sales.
3. The business expects a 30% increase in sales next year.
4. The business is expecting to retain 40% of the earning next year.
Expected increase in assets
Your answer
Spontaneous increase in current
liabilities.
Your answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19a02622-75d6-428f-9de1-469b7a50a16f%2Fcf26d071-d9ef-4470-81a4-bdfb3b22b0df%2Fs1e1j0a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:EASSY Manufacturing Company presents the following:
Statement of Comprehensive Income
December 31, 2018
Sales
480,000
Cost of sales
336,000
Gross profit
Operating expenses
144,000
57,600
Income before taxes
86,400
Income tax (30%)
12,960
73,440
Net income
P
Statement of Financial Position
December 31, 2018
Current assets
420,000
Non-current assets
500,000
Total assets
920,000
Current liabilities
90,000
Non-current liabilities
250,000
490,000
Ordinary shares
Retained earnings
Total liabilities and shareholders' equity
90,000
P
920,000
Additional information:
1. Dividends payout is 60%.
2. Only current assets and current liabilities are directly related to sales.
3. The business expects a 30% increase in sales next year.
4. The business is expecting to retain 40% of the earning next year.
Expected increase in assets
Your answer
Spontaneous increase in current
liabilities.
Your answer
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education