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

---

Definitions:

IQ Scores

A measure of a person's intellectual abilities in relation to the average performance of individuals in the same age group.

Job Performance

The degree to which an employee executes their job duties and responsibilities efficiently and effectively.

Predictive Validity

The degree to which a test or scale score forecasts future results in a connected activity or result.

Test Validity

The extent to which a test accurately measures what it is supposed to measure.