Use the Following Information and the Percent-Of-Sales Method to Answer

question 109

Multiple Choice

Use the following information and the percent-of-sales method to answer the following question(s) .
Below is the 2004 year-end balance sheet for Banner,Inc.Sales for 2004 were $1,600,000 and are expected to be $2,000,000 during 2005.In addition,we know that Banner plans to pay $90,000 in 2005 dividends and expects projected net income of 4% of sales.(For consistency with the Answer selections provided,round your forecast percentages to two decimals. )

-Banner's projected long-term debt for 2005 is:

• A)$700,000.
• B)$880,000.
• C)$380,000.
• D)$300,000.

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Definitions:

Decimal Number

A number expressed in the base 10 numeral system, which consists of digits 0 to 9 and uses a decimal point to represent fractions.

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