Sunshine Farm Supply Following Are Selected Data from the Financial Statements of Sunshine

question 24

Multiple Choice

Sunshine Farm Supply
Following are selected data from the financial statements of Sunshine Farm Supply:
-Refer to the data for Sunshine Farm Supply.
Which of the following would result from a horizontal analysis of its income statement?

• A)Cost of goods sold is 45.5% of net sales for 2016.
• B)Gross profit is 42.1% of net sales for 2016.
• C)Cost of goods sold decreased $50,000 or 23.8% during 2016.
• D)Accounts receivable total 13.3% of total assets for 2016.

---

Definitions:

Intangible Asset

A non-physical asset possessing value, such as patents, trademarks, copyrights, and goodwill.

Fair Value

The estimated price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus any costs of completion, disposal, and transport.

Going Concern

An accounting principle where it's assumed that a company will continue in business for the foreseeable future without the need to cease operations or liquidate assets.