138.Cash and accounts receivable for Adams Company are provided below:
|
Current Year
|
Prior Year
|
Cash
|
$70,000
|
$50,000
|
Accounts receivable (net)
|
70,400
|
80,000
|
What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?
ANSWER:Cash$20,000 increase($70,000 – $50,000) or 40%Accounts receivable $9,600 decrease($80,000 – $70,400) or (12%)
DIFFICULTY:Easy
139.The following items were taken from the financial statements of Tilden, Inc., over a three-year period:
Item
|
Year 3
|
Year 2
|
Year 1
|
Sales
|
$360,000
|
$335,000
|
$290,000
|
Cost of goods sold
|
225,000
|
205,000
|
185,000
|
Gross profit
|
$135,000
|
$130,000
|
$105,000
|
Compute the following for each of the above time periods.
(a)The amount and percentage change from Year 2 to Year 3.
(b)The amount and percentage change from Year 1 to Year 2.Round percentages to one decimal place.
140.Comparative information taken from the Friction Company's financial statements is shown below:
|
Year 2
|
Year 1
|
(a)
|
Notes receivable
|
$ 10,000
|
$0
|
(b)
|
Accounts receivable
|
106,200
|
90,000
|
(c)
|
Retained earnings
|
30,000
|
(40,000)
|
(d)
|
Sales
|
654,000
|
600,000
|
(e)
|
Operating expenses
|
160,000
|
200,000
|
(f)
|
Income taxes payable
|
28,000
|
20,000
|
|
|
|
|
Using horizontal analysis, show the percentage change and direction (increase or decrease) from Year 1 to Year 2with Year 1 as the base year.
141.Revenue and expense data for Young Technologies are as follows:
|
Year 2
|
Year 1
|
Sales
|
$500,000
|
$440,000
|
Cost of goods sold
|
325,000
|
242,000
|
Selling expense
|
70,000
|
79,200
|
Administrative expenses
|
75,000
|
70,400
|
Income tax expense
|
10,500
|
16,400
|
(a)Prepare an income statement in comparative form, stating each item for both years as anamount and as a percent of sales. Round to the nearest whole percent.
(b)Comment on the significant changes disclosed by the comparative income statement.
142.Cash and accounts receivable for Ashfall Co. are provided below:
|
Current Year
|
Prior Year
|
Cash
|
$62,400
|
$58,000
|
Accounts receivable (net)
|
42,000
|
50,000
|
Based on this information, what is the amount and percentage of increase or decrease that would be shown on abalance sheet with horizontal analysis?