Hanover,Inc -Refer to the Account Information for Hanover,Inc

question 16

Essay

Hanover,Inc.
Use the selected data from the comparative financial statements for Hanover,Inc.to answer the questions that follow.
$\begin{array}{c}\text {Hanover, Inc.}\\\text {Balance Sheet Accounts}\\\text {(all accounts have normal balances)}\\\text {(in millions)}\\\begin{array}{lrr}&\text { Dec. } 30,2018 &\text { Dec. } 31,2017\\\text { Inventories } & \$ 1,780 & \$ 1,649 \\\\\text { Total current assets } & \$ 9,428 & \$ 8,625\\\\\text { Liabilities in order of significance: }\\\text { Long-term debt } &\$ 14,465 & \$ 15,001 \\\text { Other noncurrent liabilities } & 4,421 & 3,148 \\\text { Deferred income taxes } & 3,504 & 3,543 \\\text { Accounts payable } & 2,556& 2,468 \\\text { Other current liabilities } &2,066 & 1,738 \\\text { Accrued sal aries and wages } & 1,538 & 1,082 \\\text { Short-term borrowings } & 1,200 & 1,126 \\\text { Accrued advertising expense } & 793& 928 \\\text { Income taxes payable } &658 & 1,142\end{array}\end{array}$

-Refer to the account information for Hanover,Inc.
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Required
(1)Calculate percentage changes in accounts payable and income taxes payable.Give a possible explanation for the changes in these accounts.
(2)By how much did Hanover's long- and short-term borrowings change from 2017 to 2018? Give a possible explanation for the change in debt.What other financial statement would be useful in analyzing the change in borrowings? Why?

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Definitions:

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Overstatement

The act of presenting financial statements or data to be more significant than they actually are, often involving higher revenues, assets, or lower expenses than exist in reality.

Note Payable

A financial obligation represented by a written promissory note which the borrower agrees to pay back to the lender.