Golden Corporation declared and paid $3,900 of cash dividends during the current year ended December 31....

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. 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-a. Use the horizontal (trend) analyses to identify the accounts where a large percentage change is accompanied by a small dollar change.
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

Expert Solution

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ekkarill92 answered 1 year ago

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