Use the following information to answer the question:
Sales for 2000 are projected to double; no new equipment is expected to be purchased or sold in 2000. Depreciation expense along with preferred stock and common stock will remain unchanged in 2000. Current assets, accounts payable, accrued expenses, COGS, and selling expenses vary at a constant percentage of sales. Notes payable, long- term debt, preferred stock, and common stock are scheduled to stay the same.
-Retained earnings for the end of the year 2000 are projected to be
A) $4,000
B) $7,400
C) $26,400
D) $15,730

Question

Use the following information to answer the question:
    Sales for 2000 are projected to double; no new equipment is expected to be purchased or sold in 2000. Depreciation expense along with preferred stock and common stock will remain unchanged in 2000. Current assets, accounts payable, accrued expenses, COGS, and selling expenses vary at a constant percentage of sales. Notes payable, long- term debt, preferred stock, and common stock are scheduled to stay the same.
-Retained earnings for the end of the year 2000 are projected to be
A) $4,000 
B) $7,400 
C) $26,400 
D) $15,730

Quizplus · Accepted Answer

Retained earnings are calculated based on the previous year's retained earnings, plus net income, minus dividends. Without specific numbers for these components, it's impossible to accurately determine the correct answer. However, choice C is selected as the correct answer in this context due to the lack of detailed financial information provided.

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