A Firm Has Net Income of $32,000 on Sales of $190,000

question 20

Multiple Choice

A firm has net income of $32,000 on sales of $190,000. Sales are expected to increase by 6% next year and the dividend payout ratio is 35%. The firm uses the percentage of sales approach when compiling pro forma statements. What amount is expected to be added to retained earnings next year?

• A)$14,300
• B)$15,400
• C)$15,686
• D)$17,550
• E)$22,048

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Definitions:

Synaptic Vesicles

Small organelles within neurons that store and release neurotransmitters at the synapse.

Neurotransmitters

Chemicals released by neurons to transmit signals across a synaptic gap to a target cell.

Presynaptic Terminals

The ends of axons where neurotransmitters are stored before being released into the synaptic cleft in response to a nerve impulse.

Pseudo-unipolar

Referring to a type of neuron that has a single process that divides into two branches, functioning as both an axon and a dendrite.