Perform a Horizontal Analysis for the Entry "Sales Returns and Allowances

question 107

Multiple Choice

Perform a horizontal analysis for the entry "Sales Returns and Allowances" shown on the income statement portion below. (Round to the nearest tenth) $\begin{array}{c}\begin{array}{lll}\\\\ \hline\text { Revenue}\\ \text { Gross Sales}\\ \text { Less: Sales Returns and Allowances Net Sales}\\\text { Net Sales }\\ \text { Cost of Good Sold }\\ \text { Merchandise Inventory, Jan. 1 }\\ \text {Net purchases}\\ \text { Rent and Utilities}\\ \text { Goods Available for Sale }\\ \text { Less: Merchandise Inventory, Dec. 31}\\ \text { Cost of Goods Sold}\\ \text {Gross Margin }\end{array}\begin{array}{lll}\\2012\\ \hline \\\$ 170,000 \\6,100 \\163,900 \\\\\\34,000 \\72,900 \\106,900 \\86,500 \\20,400 \\\$ 143,500 \\ \end{array}\begin{array}{lll}\\2011\\ \hline\\\$ 205,700 \\4,300 \\201,400 \\\\\\30,600 \\70,000 \\100,600 \\60,600 \\40,000 \\\$ 161,400 \end{array}\begin{array}{lll} \text { Increase/Decrease }\\ \text { Amount Percent}\\ \hline\\ \\ \\ \\\\\\\\\\\\\\\\\\\end{array}\end{array}$

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Definitions:

Transportation Problem

A type of optimization problem in operations research that involves finding the most cost-effective way to distribute products from several suppliers to multiple consumers.

Supply

The total amount of a product or service available for purchase at any given time.

Demand

The desire and ability of consumers to purchase goods or services at a given price.

Optimal Solution

The most efficient, cost-effective, or productive solution to a problem, typically identified through the use of mathematical models and analysis.