Chapter 1, Problem 1MCQ

To determine

Trend percents:

A horizontal form of analysis which reveals a pattern in data across successive period is known as trend percents. In this analysis items are expressed as a percentage of a base year and items are taken line by line.

To compute: Sales trend percent for 2017.

Explanation of Solution

Solution:

To compute trend percents, base amount is required firstly. Base amount is an amount which is pre decided.

Formula to calculate trend percent is,

$\text{Trend}\text{Percent}\text{(\%)=}\frac{\text{Analysis}\text{period}\text{amount}}{\text{Base}\text{period}\text{amount}}\text{×100}$

Given info,
Sales for 2016 are 300,000.
Sales for 2017 are 351,000.
Base year is 2016.

Substitute $300,000 for sales in 2016 and $351,000 sales in 2017 in above formula.

$\begin{array}{l}\text{Sales}\text{trend}\text{percent}\text{2017}=\frac{\$351,000}{\$300,000}\times 100\\ =117\%\end{array}$

Thus sales trend percent for the year 2017 is 117%.

Hence, option d is correct.