Use the following information and the percent-of-sales method to answer the following question(s).
Below is the 2004 year-end balance sheet for Banner,Inc.Sales for 2004 were $1,600,000 and are expected to be $2,000,000 during 2005.In addition,we know that Banner plans to pay $90,000 in 2005 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's projected retained earnings for 2005 are:
A)$260,000.
B)$280,000.
C)$340,000.
D)$350,000.

Question

Use the following information and the percent-of-sales method to answer the following question(s).
Below is the 2004 year-end balance sheet for Banner,Inc.Sales for 2004 were $1,600,000 and are expected to be $2,000,000 during 2005.In addition,we know that Banner plans to pay $90,000 in 2005 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's projected retained earnings for 2005 are:
A)$260,000. 
B)$280,000. 
C)$340,000. 
D)$350,000.

Quizplus · Accepted Answer

Banner's projected retained earnings for 2005 are $260,000.

Use the Following Information and the Percent-Of-Sales Method to Answer