Problem 18-10 Percentage of Sales Models (LO2) Here are the abbreviated financial statements for Planner's Peanuts: INCOME STATEMENT, 2019 Sales $9,500 Cost 7,500 Net income $ 2,000 Assets BALANCE SHEET, YEAR-END 2018 2019 $7,500 $10,000 Debt Equity $7,500 $10,000 Total 2018 $ 853 6,647 $7,500 2019 $1,000 9,000 $10,000 Total a. If sales increase by 25% 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 25%), what must be the balancing item? b. What will be the value of this balancing item? a. Dividends Balancing item Value b. 110 Problem 18-10 Percentage of Sales Models (LO2) Here are the abbreviated financial statements for Planner's Peanuts: INCOME STATEMENT, 2019 Sales $9,500 Cost 7,500 Net income $ 2,000 Assets BALANCE SHEET, YEAR-END 2018 2019 $7,500 $10,000 Debt Equity $7,500 $10,000 Total 2018 $ 853 6,647 $7,500 2019 $1,000 9,000 $10,000 Total a. If sales increase by 25% 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 25%), what must be the balancing item? b. What will be the value of this balancing item? a. Dividends Balancing item Value b. 110