CP13-1 (Algo) Analyzing Comparative Financial Statements Using Horizontal Analyses [LO 13-2, LO 13-5] Golden Corporation declared and paid $3,700 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Required: 1. Complete the horizontal analyses for each item in Golden Corporation's comparative financial statements. TIP: Calculate the increase (decrease) by subtracting the previous year from the current year. Calculate the percentage by dividing the amount of increase (decrease) by the previous-year balance. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.) 2-a. Use the horizontal (trend) analyses to identify the accounts where a large percentage change is accompanied by a small dollar change. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) 2-b. Use the horizontal (trend) analyses to identify the accounts where a directional change in one account balance is inconsistent with the directional change in a related account balance. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Check my work GOLDEN CORPORATION Horizontal Analysis Current Previous Increase (Decrease) in Current (versus Previous) Amount Percentage Income Statement Sales revenue $ 187,000 $ 169,900 % Cost of goods sold 113,500 102,800 % Gross profit 73,500 67,100 % Operating expenses 54,700 51,100 % Interest expense 3,400 3,230 % Income before income taxes 15,400 12,770 % 5,050 3,700 % $ 10,350 $ 9,070 % Income tax expense Net income Balance Sheet Cash $ 2,950 $ 7,300 % Accounts receivable (net) 19,700 22,300 % Inventory 40,700 35,700 % Property and equipment (net) 46,400 41,500 % Total Assets $ 109,750 $ 106,800 % Current liabilities $ 16,700 $ 20,400 % Notes payable (long-term) 38,000 38,000 % Common stock (par $5) 37,000 37,000 % Additional paid-in capital 5,700 5,700 % Retained earnings 12,350 5,700 % Total liabilities & stockholders' equity $ 109,750 $ 106,800 % < Required 1 Required 2A > Required 1 Required 2A Required 2B Use the horizontal (trend) analyses to identify the accounts where a large percentage change is accompanied by a small dollar change. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Sales revenue Cost of goods sold Operating expenses Interest expense Income tax expense Gross profit Net income Income before income taxes Cash Accounts receivable (net) Inventory Property and equipment (net) Current liabilities Note payable (long-term) Retained earnings Additional paid-in capital Common stock 00000000000000 < Required 1 Required 2B > Show less Ch Required 1 Required 2A Required 2B Use the horizontal (trend) analyses to identify the accounts where a directional change in one account balance is inconsistent with the directional change in a related account balance. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Sales revenue Cost of goods sold Operating expenses Interest expense Income tax expense Gross profit Net income Income before income taxes Cash Accounts receivable (net) Inventory Property and equipment (net) Current liabilities Note payable (long-term) Retained earnings Additional paid-in capital Common stock < Required 2A Required 2B > Show less