Using the Following Selected Items from the Comparative Balance Sheet

question 59

Essay

Using the following selected items from the comparative balance sheet of Ames Company illustrate horizontal and vertical analysis. $\begin{array}{lcc}&\text { December 31, } 2015& \text { December 31, } 2014\\\text { Accounts Receivable } & \$ 960,000 & \$ 600,000 \\\text { Inventory } & 975,000 & 780,000 \\\text { Total Assets } & 4,000,000 & 2,500,000\end{array}$

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Definitions:

Static Budget

A fixed budget that does not change with the level of activity or production volume, often used for planning purposes.

Level Of Activity

A measurement of the volume of production or operations within a business, which can affect various costs and efficiency metrics.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.

Actual Level

The real, observed level of activity, production, or performance in a given period.