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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Horizontal analysis

The comparative accounts payable and long-term debt balances for a company follow.

  Current Year Previous Year
Accounts payable $111,000 $100,000
Long-term debt 132,680 124,000

Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis?

To determine

Horizontal Analysis

Horizontal analysis refers to the measurement of percentage change in the comparative financial statements. It compares the items from the financial statements from one to the other years, and indicates the trends.

To determine: the amount and percentage of increase or decrease to be shown on the balance sheet with horizontal analysis

Given info: Temporary investments and inventory

Explanation

Following formula is used for computing the change in dollar amount of items in the balance sheet for current year and previous year, and the percentage change for the respective items.

Change in amount = Amount in current year-Amou

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