Question

The following is a summary of information presented on the financial statements of a company on December​ 31, 2019. Account 2019 2018 Net Sales Revenue ​$607,000 ​$502,000 Cost of Goods Sold ​450,000 ​406,000 Gross Profit ​157,000 ​96,000 Selling Expenses ​54,000 ​52,000 Net Income Before Income Tax Expense ​103,000 ​44,000 Income Tax Expense ​38,000 ​24,000 Net Income ​$65,000 ​$20,000 With respect to net sales​ revenue, a horizontal analysis reveals​ ________. A. a​ 240.62% decrease in net sales revenue B. a​ 20.92% increase in net sales revenue C. a​ $44,000 increase in net sales revenue D. a decrease of​ $44,000 in net sales revenue

2 ​National, Inc. provides the following​ data:

Cash	​$45,000	​$25,000
Accounts​ Receivable, Net	​138,000	​62,000
Merchandise Inventory	​70,000	​50,000
​Property, Plant, and​ Equipment, Net	​200,000	​120,000
Total Assets	​$453,000	​$257,000

For the year ending December​ 31, 2019:

Net Credit Sales	​$250,000
Cost of Goods Sold	​(110,000)
Gross Profit	​$140,000

Calculate the accounts receivable turnover ratio for 2019.​ (Round your answer to two decimal​ places.)

A.

2.50 times

B.

3.28 times

C.

5.00 times

D.

1.81 times

3

The financial statements of Trenton Office Supply include the following​ items:

	2019	2018
Cash	$ 42 comma 500$42,500	$ 47 comma 000$47,000
Shortminus−term Investments	27 comma 00027,000	18 comma 00018,000
Net Accounts Receivable	96 comma 00096,000	101 comma 000101,000
Merchandise Inventory	135 comma 000135,000	120 comma 000120,000
Total Assets	526 comma 000526,000	544 comma 000544,000
Total Current Liabilities	252 comma 000252,000	239 comma 000239,000
Longminus−term Note Payable	61 comma 00061,000	53 comma 00053,000

What is the 2019 current​ ratio? (Round your answer to two decimal​ places.)

A.1.19

B.0.84

C.1.68

4

A business makes a payment of​ $1,400 on a note payable. Which of the following journal entries would be​ recorded?

A.

Cash is credited and Financing Expense is debited for​ $1,400.

B.

Cash is debited and Financing Revenue is credited for​ $1,400.

C.

Cash is credited and Notes Payable is debited for​ $1,400.

D.

Notes Payable is credited and Cash is debited for​ $1,400.

D.0.57

Answer 1

1) Horizontal analysis

	2019	2018	Increase (decrease) Amount	Increase (decrease) %
Net Sales revenue	607000	502000	105000	20.92%

So answer is  B. a​ 20.92% increase in net sales revenue

2) Account receivable turnover = 250000/100000 = 2.5

So answer is a) 2.50 Times

3) Current ratio = 300500/252000 = 1.19

So answer is a) 1.19

4) Journal entry

date	account and explanation	Debit	Credit
	Notes payable	1400
	Cash		1400

So answer is c) Cash is credited and notes payable is debited for $1400