Question

Golden Corporation declared and paid $3,900 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data:

Required:

1. 1. Complete the horizontal analyses for each item in Golden Corporation’s comparative financial statements. TIP: Calculate the increase (decrease) by subtracting the previous year from the current year. Calculate the percentage by dividing the amount of increase (decrease) by the previous year balance.
2. 2-a. Use the horizontal (trend) analyses to identify the accounts where a large percentage change is accompanied by a small dollar change.
3. 2-b. Use the horizontal (trend) analyses to identify the accounts where a directional change in one account balance is inconsistent with the directional change in a related account balance.

Complete the horizontal analyses for each item in Golden Corporation’s comparative financial statements. TIP: Calculate the increase (decrease) by subtracting the previous year from the current year. Calculate the percentage by dividing the amount of increase (decrease) by the previous year balance. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.)

GOLDEN CORPORATION Horizontal Analysis Increase (Decrease) in Current (versus Previous) Current Previous Amount Percentage Income Statement Sales revenue $189,000 $171,300 % Cost of goods sold 114,500 103,600 Gross profit 74,500 67,700 Operating expenses 55,100 51,300 Interest expense 3,600 3,410 Income before income taxes 15,800 12,990 Income tax expense 5,350 3,900 Net income $10,450 $9,090 % Balance Sheet Cash $2,650 $7,100 % Accounts receivable (net) 19,900 22,100 Inventory 40,900 35,900 Property and equipment (net) 46,800 42,500 $110,250 $107,600 % Current liabilities $16,900 $20,800 % Note payable (long-term) 36,000 36,000 Common stock (par $5) 39,000 39,000 Additional paid-in capital 5,900 5,900 Retained earnings 12,450 5,900 $110,250 $107,600 %

*This is all the info I am given for this question

Answer 1

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