The Galloway Corporation Data for the Current Year - What Would a Horizontal Analysis Report with Respect to

question 105

Multiple Choice

The Galloway Corporation data for the current year: $\begin{array}{|l|l|l|}\hline \text { Account } & \text { Current year } & \text { Prior year } \\\hline \text { Current assets } & \$ 46,200 & \$ 42,000 \\\hline \text { A/R } & \$ 69,000 & \$ 60,000 \\\hline \text { Mdse. Inventory } & \$ 67,500 & \$ 50,000 \\\hline \text { Current liabilities } & \$ 46,200 & \$ 33,000 \\\hline \text { Long-term liabilities } & \$ 26,600 & \$ 28,000 \\\hline \text { Common stock (5,000 shares) } & \$ 42,000 & \$ 35,000 \\\hline \text { Retained earnings } & \$ 67,900 & \$ 56,000 \\\hline \text { Net sales revenue } & \$ 625,000 & \$ 500,000 \\\hline \text { COGS } & \$ 520,000 & \$ 400,000 \\\hline \text { Gross Profit } & \$ 105,000 & \$ 100,000 \\\hline \text { Selling/General expenses } & \$ 45,000 & \$ 50,000 \\\hline \text { Net income before taxes } & \$ 60,000 & \$ 50,000 \\\hline \text { Income tax expense } & \$ 16,500 & \$ 15,000 \\\hline \text { Net Income } & \$ 43,500 & \$ 35,000\\\hline\end{array}$



- What would a horizontal analysis report with respect to net income before income tax expense and net income?

• A)Both net income before tax expense and net income are 6.96% of net sales revenue.
• B)Both net income before income tax expense and net income increased by $78,500.
• C)There was an increase in net income of 24.29% .
• D)The current ratio is: 1.00.

---

Definitions:

Repartition

Repartitioning refers to the process of changing the partition layout on a disk drive, which can involve resizing, creating, or deleting disk partitions.

Magnet

An object or material that produces a magnetic field, attracting or repelling certain materials like iron.

Mstsc Command

A command-line instruction used to initiate the Microsoft Terminal Services Client, which allows users to connect to a remote desktop.

Remotely Accessing

The process of obtaining access to a computer or network from a distance, typically via the internet, allowing for control or data manipulation from afar.