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The comparative temporary investments and inventory balances of a company follow. Current Year Previous Year Accounts payable $57,138 $53,400 Long-term debt 37,944 55,800 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Amount of Change Increase/Decrease Percentage Accounts payable $4 % Long-term debt %

The comparative temporary investments and inventory balances of a company follow. Current Year Previous Year Accounts payable $57,138 $53,400 Long-term debt 37,944 55,800 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Amount of Change Increase/Decrease Percentage Accounts payable $4 % Long-term debt %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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horizontal analysis

The comparative temporary investments and inventory balances of a company follow. Current Year Previous Year Accounts payable $57,138 $53,400 Long-term debt 37,944 55,800 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Amount of Change Increase/Decrease Percentage Accounts payable $4 % Long-term debt %
Transcribed Image Text:The comparative temporary investments and inventory balances of a company follow. Current Year Previous Year Accounts payable $57,138 $53,400 Long-term debt 37,944 55,800 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Amount of Change Increase/Decrease Percentage Accounts payable $4 % Long-term debt %
Expert Solution
Step 1

Horizontal analysis is a financial statement analysis technique that shows changes in the amounts over a period of time in the account balances. It is also known as trend analysis.

 

Step 2

Accounts payable:

Amount of change = 57,138-53,400 = $3,738

Trend is Increase

Percent of increase=3738/53400*100 =7%

 

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