Here are the abbreviated financial statements for Planner's Peanuts Income Statement , 2019 Sales $2,000 Cost 1,500 Net Income $ 500 Balance Sheet, Year End 2018 2019 2018 2019 Assets $2,500 $3,000 Debt $ 833 $1,000 Equity 1,667 2,000 Total $2,500 $3,000 Total $2,500 $3,000 a. if sales increase by 20% 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 20%), what must be the balancing item? b. what will be the value of this balancing item
Here are the abbreviated financial statements for Planner's Peanuts Income Statement , 2019 Sales $2,000 Cost 1,500 Net Income $ 500 Balance Sheet, Year End 2018 2019 2018 2019 Assets $2,500 $3,000 Debt $ 833 $1,000 Equity 1,667 2,000 Total $2,500 $3,000 Total $2,500 $3,000 a. if sales increase by 20% 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 20%), what must be the balancing item? b. what will be the value of this balancing item
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
Percentage of Sales Models
Here are the abbreviated financial statements for Planner's Peanuts
| Income Statement , 2019 |
| Sales $2,000 |
| Cost 1,500 |
| Net Income $ 500 |
| 2018 | 2019 | 2018 | 2019 | ||
| Assets | $2,500 | $3,000 | Debt | $ 833 | $1,000 |
| Equity | 1,667 | 2,000 | |||
| Total | $2,500 | $3,000 | Total | $2,500 | $3,000 |
a. if sales increase by 20% 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 20%), what must be the balancing item?
b. what will be the value of this balancing item?
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