1. Under the percentage of sales forecasting method, which of the following increases by the same proportion that sales increases:
a) depreciation expense
b) interest expense
c) all of these answers increase by the same proportion that sales increases
d) retained earnings
e) income taxes
2. Under the percentage of sales forecast, the amount of dividends a company pays will affect the amount of ______ in next year’s balance sheet:
a) stockholder’s equity
b) assets
c) liabilities
d) both retained earnings and stockholder's equity
e) retained earnings