Answered: Year 1 Year 2 Year 3 Year 4 Year 5…

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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Question

Trend Percentages

Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company’s current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows:

Required:

1. Express all of the asset, liability, and sales data in trend percentages. (Show percentages for each item.) Use Year 1 as the base year and carry computations to one decimal place.

2. Comment on the results of your analysis.

Year 1
Year 2
Year 3
Year 4
Year 5
Sales
$1,800,000
$1.980,000
$2.070.000
$2,.160.000
$2.250.000
$ 48,000
345,000
660,000
510,000
720.000
Cash
300,000
Accounts receivable, net
Inventory
570,000
750,000
$1,350,000
690.000
Total current assets
$ 950.000
$1,070,000
$1,143.000
$1,270,000
Current labilities..
$ 400.000

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