Decker Enterprises
Below Are the Simplified Current and Projected Financial

question 12

Multiple Choice

Decker Enterprises
Below are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating li abilities.
$\begin{array} { l c r } \text { Income statement } & \text { Current} & \text { Projected } \\ \text { Sales } & \text { na } & 1,500 \\ \text { Costs } & \text { na } & 1,080 \\ \text { Profit before tax } & \text { na } & 420 \\ \text { Taxes } ( 25 \% ) & \text { na } &\underline{ 105} \\ \text { Net income } & \text { na } & 315 \\ \text { Dividends } & \text { na } & 95 \end{array}$
$\begin{array} { l r r l r r } \text { Balance sheets } & \text { Current } & \text { Projected } & & \text { Current } & \text { Projected } \\ \text { Current assets } & 100 & 115 & \text { Current liabilities } & 70 & 81 \\ \text { Net fixed assets } & 1,200 & 1,440 & \text { Long-term debt } & 300 & 360 \\ & & & \text { Common stock } & 500 & 500 \\ & & & \text { Retained earnings } & 430 & 650 \end{array}$
-If Decker had a financing surplus, it could remedy the situation by

• A) borrowing on its line of credit.
• B) issuing more common stock.
• C) reducing its dividend.
• D) borrowing from its retained earnings
• E) paying a special dividend

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Definitions:

Noon

The middle of the day, typically regarded as 12:00 PM, when the Sun is at its highest point in the sky.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and absorbed by plants in photosynthesis.

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize foods with carbon dioxide and water.

Internal Concentration

The concentration of substances within a cell or organism in contrast to the external environment, crucial for maintaining homeostasis.