Problem 15-1 Comparative information taken from the Koda Company financial state

Question

Problem 15-1

Comparative information taken from the Koda Company financial statements is shown below:

                                                         2012                            2011

(a) Notes Receivable               $      10,000                           -0-

(b) Accounts Receivable                 175,000                      140,000

(c) Retained Earnings                       30,000                       (40,000)

(d) Sales                                          840,000                      750,000

(e) Operating Expenses                  160,000                      200,000

(f)                                                       28,000                        20,000                          

Required:

Using horizontal analysis, show the percentage change from 2011 to 2012 with 2011 as the base year. If an item is impossible to compute, enter a "0" in the percentage box and select "Not possible to compute" in the narrative box.

Select: Increase, Decrease, or Not possible to compute

Explanation / Answer

Hi,

Please find the answer as follows:

a) Not Possible to Compute

b) =(175000-140000)/140000 = 25% Increase

c) Not Possible to Compute

d) = (840000-750000)/750000 = 12% Increase

e) = (160000-200000)/200000 = -20% Decrease

f) = (28000-20000)/20000 = 40% Increase

Thanks.

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