Question
The following is summary of information presented on the financial statements of a company on December 31, 2015. Account 2015 2014 Current Assets $65,000 $50,000
The following is summary of information presented on the financial statements of a company on December 31, 2015.
| Account | 2015 | 2014 |
| Current Assets | $65,000 | $50,000 |
| Accounts Receivable | 80,000 | 75,000 |
| Merchandise Inventory | 50,000 | 40,000 |
| Current Liabilities | 75,000 | 50,000 |
| Long-term Liabilities | 30,000 | 50,000 |
| Common Stock | 50,000 | 40,000 |
| Retained Earnings | 40,000 | 25,000 |
| Net Sales Revenue | $525,000 | $500,000 |
| Cost of Goods Sold | 400,000 | 395,000 |
| Gross Profit | $125,000 | $105,000 |
| Selling Expenses | 45,000 | 50,000 |
| Net income before income tax expense | $80,000 | $55,000 |
| Income tax expense | 24,000 | 16,500 |
| Net Income | $56,000 | $38,500 |
What would a horizontal analysis report show with respect to current liabilities?
| A. a current ratio of .87 | ||
| B. a 33.33% increase in current liabilities | ||
| C. current liabilities are 38.46% of total capital | ||
| D. a 50.00% increase in current liabilities |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Business Ethics A Stakeholder And Issues Management Approach
Authors: Joseph W. Weiss
7th Edition
1523091541, 978-1523091546
