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ABC Gum company expects to earn 150,000 next year. Twenty percent of profits are used...

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Finance

ABC Gum company expects to earn 150,000 next year. Twenty percent of profits are used to pay off debt and the rest is kept by the business for future growth. If 75 % of the retained earnings will be used for increased inventory and the rest for new capital assets, please complete the distribution of profit calculations and select the statement that is true:

a. Inventory will increase by $90,000

b. Capital assets will increase by $90,000

c. Retained Earnings will increase by $30,000

d. Inventory will increase by $22,500

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