Question
Barbaras Bakery Ltd. has the following balance sheet as of December 31, 2019. Current assets $800 Accounts payable $350 Accounts Receivable 450 Accrued wages 150
Barbaras Bakery Ltd. has the following balance sheet as of December 31, 2019. | ||||
Current assets | $800 |
| Accounts payable | $350 |
Accounts Receivable | 450 |
| Accrued wages | 150 |
Inventories | 1,950 |
| Notes payable | 2,000 |
|
|
| Mortgage | 26,500 |
Net Fixed assets | 53,000 |
| Common stock | 13,200 |
|
|
| Retained Earnings | 14,000 |
Total assets | $56,200 |
| Total liabilities and equity | $56,200 |
In 2019, sales were $92,000, net income was $5,000, and dividends were $0. Sales will increase by 50% in 2020. Assume the companys current assets and spontaneous liabilities are at full capacity, so both will increase proportionately with an increase in sales. The companys fixed assets are at 65% of capacity. How much are total assets expected to increase in 2020?
a) $5,700
b) $960
c) $9,136
d) $1,600
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