The Following Is a Summary of Information Presented on the Financial

question 95

Multiple Choice

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2014.
$\begin{array}{|l|r|c|}\hline \text { Account }&2014&2013\\\hline \text { Current assets } & \$ 65,000 & \$ 50,000 \\\hline \text { Accounts receivable } & 80,000 & 75,000 \\\hline \text { Merchandise inventory } & 50,000 & 40,000 \\\hline \text { Current liabilities } & 75,000 & 50,000 \\\hline \text { Long-term liabilities } & 30,000 & 50,000 \\\hline \text { Common stock } & 50,000 & 40,000 \\\hline \text { Retained earnings } & 40,000 & 25,000\\\hline \\\hline \text { Net sales revenue } & \$ 525,000 & \$ 500,000 \\\hline \text { Cost of goods sold } & 400,000 & 395,000 \\\hline \text { Gross profit } & \$ 125,000 & \$ 105,000 \\\hline \text { Selling and general expenses } & 45,000 & 50,000 \\\hline \text { Net income before income tax expense } & \$ 80,000 & \$ 55,000 \\\hline \text { Income tax expense } & \$ 24,000 & 16,500 \\\hline \text { Net income } & \$ 56,000 & \$ 38,500 \\\hline\end{array}$


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What would horizontal analysis report with respect to net sales revenue?

• A) A 5% increase in net sales revenue
• B) A dividend yield of $8.20
• C) That cost of goods sold is 79.19% of net sales revenue
• D) An accounts receivable turnover of 7.24 times

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Definitions:

Sound Waves

Waves of sound that propagate through air or other materials, perceived when they make contact with an individual's or an animal's ear.

Amplitude

In physics, it is the maximum extent of a vibration or oscillation, measured from the position of equilibrium.

Pitch

A term that can refer to the perceived frequency of a sound, often described as how "high" or "low" a note sounds.

Nerve Hearing Impairment

A type of hearing loss resulting from damage or dysfunction of the auditory nerve, affecting the transmission of sound signals to the brain.