The Following Is Summary of Information Presented on the Financial

question 67

Multiple Choice

The following is summary of information presented on the financial statements of a company on December 31, 2019. $$\begin{array} { | l | r | r | } \hline \text { Account } & { \mathbf { 2 0 1 9 } } & { \mathbf { 2 0 1 8 } } \\\hline \text { Current Assets } & \$ 66,000 & \$ 50,000 \\\hline \text { Accounts Receivable } & 83,000 & 78,000 \\\hline \text { Merchandise Inventory } & 53,000 & 44,000 \\\hline \text { Current Liabilities } & 75,000 & 52,000 \\\hline \text { Long-term Liabilities } & 31,000 & 53,000 \\\hline \text { Common Stock } & 51,000 & 40,000 \\\hline \text { Retained Earnings } & 45,000 & 27,000 \\\hline & & \\\hline \text { Net Sales Revenue } & \$ 527,000 & \$ 506,000 \\\hline \text { Cost of Goods Sold } & \underline { 400,000 } & \underline { 401,000 } \\\hline \text { Gross Profit } & \$ 127,000 & \$ 105,000 \\\hline \text { Selling Expenses } & \underline { 48,000 } & \underline { 50,000 } \\\hline \text { Net Income Before Income Tax Expense } & \$ 79,000 & \$ 55,000 \\\hline \text { Income Tax Expense } & \underline { \$ 5,000 } & \$ 17,000 \\\hline \text { Net Income } & \$ 54,000&\$38,000 \\\hline\end{array}$$ With respect to current liabilities, a horizontal analysis reveals ________. (Round your answer to two decimal places.)

• A) that current liabilities are 37.13% of total equity
• B) a 44.23% increase in current liabilities
• C) a current ratio of 0.88
• D) a 30.67% increase in current liabilities

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Definitions:

Exxon Valdez

An oil tanker whose 1989 spill off the coast of Alaska is considered one of the world's worst environmental disasters, causing extensive ecological damage.

Point Source

A single, identifiable source of pollution, such as a pipe or smokestack, that discharges pollutants into the environment.

Untreated Sewage

Wastewater and human wastes that have not been processed or cleaned, often containing harmful pollutants and pathogens.

Freshwater Ecosystems

Aquatic systems of low salt concentration, including rivers, lakes, streams, ponds, and wetlands, supporting diverse life forms.