Perform a Vertical Analysis for the Balance Sheet Entry "Accounts

question 16

Multiple Choice

Perform a vertical analysis for the balance sheet entry "Accounts Payable" given below. (Round to the nearest tenth) $$\begin{array}{l}\text { Liabilities and Owner's Equity }\\\begin{array} { l l } \hline \text { Current Liabilities } & \\\text { Accounts Payable } & \$ 8,100 \\\text { Sal aries Payable } & 14,600 \\\text { Taxes Payable } & 1,500 \\\text { Total Current Liabilities } & 24,200 \\\text { Long-term Liabilities } & \\\text { Debenture Bond } & 6,000 \\\text { Total Liabilities } & 30,200 \\\text { Stockholder's Equity } & \\\text { Retained earnings } & 6,700 \\\text { Total Liabilities and Stockholder's Equity } & \$ 36,900 \\\hline\end{array}\end{array}$$

• A) 22.0%
• B) 17.5%
• C) 16.9%
• D) 14.8%

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Definitions:

Concrete Operational

A stage in Piaget’s theory of cognitive development (roughly ages 7 to 11) during which children gain the ability to think logically about concrete events.

Analytic

Pertaining to or resulting from the process of breaking down complex information or problems into simpler parts for better understanding or resolution.

Abstract

Pertaining to ideas, concepts, or qualities not associated with specific objects or events and not having physical existence.

Logical Thinking

The process of reasoning consistently and sensibly, using a structured and methodical approach to analyze and solve problems.