Here are the abbreviated financial statements for Planner’s Peanuts:   INCOME STATEMENT, 2019 Sales $ 5,500   Cost   4,300   Net income $ 1,200       BALANCE SHEET, YEAR-END     2018   2019       2018   2019   Assets   $ 8,500     $ 9,200     Debt   $ 823     $ 1,000                         Equity     7,677       8,200     Total   $ 8,500     $ 9,200     Total   $ 8,500     $ 9,200         a. If sales increase by 15% 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 15%), what must be the balancing item? b. What will be the value of this balancing item?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter2: Introduction To Financial Statements
Section: Chapter Questions
Problem 1PB: The following information is taken from the records of Rosebloom Flowers for the year 2019. A....
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I need help please. I have all of the answers except B. 

 

Here are the abbreviated financial statements for Planner’s Peanuts:

 

INCOME STATEMENT, 2019
Sales $ 5,500  
Cost   4,300  
Net income $ 1,200  
 

 

BALANCE SHEET, YEAR-END
    2018   2019       2018   2019  
Assets   $ 8,500     $ 9,200     Debt   $ 823     $ 1,000    
                    Equity     7,677       8,200    
Total   $ 8,500     $ 9,200     Total   $ 8,500     $ 9,200    
 

 

a. If sales increase by 15% 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 15%), what must be the balancing item?

b. What will be the value of this balancing item?

 

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