Following Are Selected Data from the Financial Statements of Mother

question 115

Multiple Choice

Following are selected data from the financial statements of Mother Nature Supplies: $\begin{array} { r r }& \underline { \mathbf { 2 0 1 7 } } & \underline { \mathbf { 2 0 1 6 } } \\ \text {Accounts receivable}&\$ 60,000 & \$ 38,000 \\\text {Merchandise inventory}& 12,000 & 16,000 \\ \text {Total assets}&450,000 & 380,000 \\ \text {Net sales}&380,000 & 270,000 \\ \text {Cost of goods sold}&160,000 & 210,000 \end{array}$
-Refer to the data for Mother Nature Supplies. ?
Which of the following would result from a horizontal analysis of its balance sheet?

• A) Accounts receivable increased $22,000 or 57.9% during 2017.
• B) Accounts receivable is five times larger than Merchandise inventory in 2017.
• C) Accounts receivable is 13.3% of total assets for 2017.
• D) Merchandise inventory is 2.7% of total assets for 2017.

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