A Firm Has Net Income of $439,000 on Sales of $690,000

question 55

Multiple Choice

A firm has net income of $439,000 on sales of $690,000. Sales are expected to increase by 4% next year and the dividend payout ratio is 40%. 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)$241,300
• B)$253,000
• C)$273,936
• D)$307,550
• E)$322,048

---

Definitions:

Pupil Dilation

The widening of the pupil, which can occur in response to decreased light exposure or emotional arousal, to allow more light into the eye.

Parasympathetic Ganglia

Clusters of neurons in the parasympathetic nervous system that regulate bodily functions to conserve energy and maintain homeostasis.

Terminal Ganglia

Nerve cell clusters located near or within the organs they innervate, involved in the autonomic nervous system.

Parasympathetic Fibers

Nerve fibers of the parasympathetic nervous system that regulate body functions, promoting rest and digestion.