Comparative information taken from the Bergeron Company financial statements is shown here:

2022 2021

(a) Accounts receivable $ 175,000 $ 140,000

(b) Retained earnings 30,000 (14,000)

(c) Sales revenue 855,000 750,000

(d) Operating expenses 170,000 200,000

(e) Income taxes payable 11,000 10,000

Instructions

Using horizontal analysis, show the percentage change from 2021 to 2022 with 2021 as the base year.

Show your work.

Item

Accounts receivable: 25% | Increase

Retained earnings: 314% | Increase.

Sales revenue: 14% | Increase

Operating expenses: 15% | Decrease

Income taxes payable: 10% | Increase

Explain whether the trends are favorable or unfavorable for each item.

(a)

(b)

( c )

(d)

(e)

Comparative information taken from the Bergeron Company financial statements is shown here:

2022 2021

(a) Accounts receivable $175,000 $ 140,000

(b) Retained earnings

$30,000 (14,000)

(c) Sales revenue $ 855,000 750,000

(d) Operating expenses $170,000 200,000

(e) Income taxes payable 11,000 10,000

Instructions

Using horizontal analysis, show the percentage change from 2021 to 2022 with 2021 as the base year.

Show your work.

Item

Accounts receivable: 25% | Increase

Retained earnings: 314% | Increase.

Sales revenue: 14% | Increase

Operating expenses: 15% | Decrease

Income taxes payable: 10% | Increase

Explain whether the trends are favorable or unfavorable for each item.

(a)

(b)

( c )

(d)

(e)