question 29
Multiple Choice
Comparative financial statements for Bent Stew Enterprises are shown below: Assets Current assets: Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment, net Intangible assets, net Total assets Liabilities and Stockholders’ Equity Current liabilities: Accounts payable Other current liabilities Total current liabilities Long-term debt Total liabilities Stockholders’ equity: Common stock Additional paid-in capital Retained earnings Total stockholders’ equity Total liabilities and stockholders’ equity Sales Cost of goods sold Gross margin Operating expenses Operating income Interest expense Earnings before income taxes Income taxes Net earnings December 312018$3,0008,50012,0001,40024,900103,60064,000$192,500$11,00011,80022,800120,000142,80015,00020,00014,70049,700$192,500 Year Ended December 312018$250,000164,00086,00064,00022,0007,50014,5007,800$6,7002017$8006,0008,20090015,900123,30047,000$186,200$12,0003,20015,200128,000143,20015,00020,0008,00043,000$186,2002017$230,000142,30087,70054,00033,7005,90027,8007,140$20,680 Using horizontal analysis, how would you best describe the change in the company's operating expenses from 2017 to 2018?
Definitions:
Average Cost
The total cost of goods available for sale divided by the number of items available for sale, used to determine the cost of goods sold and ending inventory.
Declining Prices
A situation where prices of goods, securities, or commodities decrease over time due to various factors like market oversupply, low demand, or economic downturns.
Net Income
The amount of profit left over, after all expenses and taxes have been subtracted from total revenue.
Performance Bonuses
Performance bonuses are additional compensation provided to employees as a reward for achieving or surpassing predefined performance targets.