### Brief Exercise 18-04Using these data from the comparative balance sheet of Rollaird Company, perform horizontal analysis.#### Data Table:| | December 31, 2020 | December 31, 2019 ||-----------------------:|-----------------:|-----------------:|| **Accounts receivable**| $532,000 | $400,000 || **Inventory** | $861,800 | $620,000 || **Total assets** | $2,954,350 | $2,569,000 |*Note: Enter negative amounts using either a negative sign preceding the number e.g., -45 or parentheses e.g., (45).*#### Horizontal Analysis:| | December 31, 2020 | December 31, 2019 | Increase or (Decrease) | ||-----------------------:|-----------------:|-----------------:|-----------------------:|----------------:|| **Accounts receivable**| $532,000 | $400,000 | $______ | ______%|| **Inventory** | $861,800 | $620,000 | $______ | ______%|| **Total assets** | $2,954,350 | $2,569,000 | $______ | ______%|[Link to Text]#### Detailed Explanation:The table above shows the balance sheet data for Rollaird Company on December 31, 2020, and December 31, 2019. It includes values for accounts receivable, inventory, and total assets. The goal is to perform a horizontal analysis to determine the amount and percentage increase or decrease between the two years.Horizontal analysis compares financial data over a period of time to identify trends and growth patterns. This involves calculating both the dollar and percentage changes between the periods.**Instructions for Calculation:**1. **Dollar Change Amount**: - Subtract the 2019 value from the 2020 value for each category.2. **Percentage Change**: - Use the formula: \[ \text{Percentage Change} = \left( \frac{\text{2020 Value} - \text{2019 Value}}{\text{2019 Value}} \right) \times 100 \]Fill in the "Increase or (Decrease)" columns with the calculated dollar and percentage amounts.

Comparative balance sheet: A comparative balance sheet represents the financial differences between…

Answered: Using these data from the comparative…

Business

Accounting

Using these data from the comparative balance sheet of Rollaird Company, perform horizontal analysis.

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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