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10.Douglass Enterprises Income Statement for the Present Year Sales Costs Taxable Income Taxes Net Income Dividends Addition to ret. earnings Douglass Enterprises Balance Sheet for

10.Douglass Enterprises Income Statement for the Present Year Sales Costs Taxable Income Taxes Net Income Dividends Addition to ret. earnings Douglass Enterprises Balance Sheet for the Present Year Cash Accounts rec. Inventory Current assets Fixed assets Total assets $1,010 Accounts payable Notes payable $302 $361 Current liabilities $1,673 Long-term debt $5,200 Common stock Retained earnings $6,873 Total liabilities, & equity $4,840 $4,120 $720 $245 $475 $190 $285 $536 $1,500 $2,036 $1,200 $3,000 $637 $6,873 Assets, accounts payable and costs are proportional to sales. Debt and equity are not. The sales of Douglass Enterprises are expected to increase by 9% next year. The debt-equity ratio and the dividend payout ratio are to be held constant. Currently the firm is producing at 82% of capacity. What is the addition to retained earnings?
a. $518
b. 385$
c. 311$
d. 475$
e. 437$ image text in transcribed
image text in transcribed
Assets, occounts payabie and costs are proportional to sales. Debt and equty are net The sales of Dougiass Enterprises are expected to increase by 9% next yeac the debt-equity ratio and the dividend payout ratio are to be held constant Curtenty the firm is probucing at B2\% of copocity What is the addtion to retained earnings? Multiple Choice $518 $385 $311 $475 $437

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