Here are the abbreviated financial statements for Planner’s Peanuts: INCOME STATEMENT, 2017 Sales $ 4,000 Cost 3,100 Net income $ 900 BALANCE SHEET, YEAR-END 2016 2017 2016 2017 Assets $ 5,500 $ 6,900 Debt $ 833 $ 1,000 Equity 4,667 5,900 Total $ 5,500 $ 6,900 Total $ 5,500 $ 6,900
a. If sales increase by 15% in 2016 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 15%), what must be the balancing item? Debt Cost Dividends Net income Sales
b. What will be the value of this balancing item?