Compute the Sales Growth Index and select the best Answer: 12/31/2020 12/31/2021 Cash $5,000 Cash $7,000 AR $20,000 AR $45,000 Current Assets $60,000 Current Assets $55,000 Net Fixed Assets $100,000 Net Fixed Assets $120,000 Total Assets $200,000 Total Assets $360,000 Sales $400,000 Sales $450,000 Cost of Sales $300,000
Compute the Sales Growth Index and select the best Answer:
12/31/2020 12/31/2021
Cash $5,000 Cash $7,000
Current Assets $60,000 Current Assets $55,000
Net Fixed Assets $100,000 Net Fixed Assets $120,000
Total Assets $200,000 Total Assets $360,000
Sales $400,000 Sales $450,000
Cost of Sales $300,000 Cost of Sales $340,000
A. The index is 1.125 and suggests earnings management
B. The index is 1.125 and does not suggest earnings management
C. The index is .89 and suggests earnings management
D. The index is .89 and does not suggest earnings management
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