The Following Is Summary of Information Presented on the Financial

question 96

Multiple Choice

The following is summary of information presented on the financial statements of a company on December 31,2017. $\begin{array}{|l|r|r|}\hline \text { Account } & 2017 & 2016 \\\hline \text { Current Assets } & \$ 68,000 & \$ 51,000 \\\hline \text { Accounts Receivable } & 83,000 & 78,00 \\\hline \text { Merchandise Inventory } & 52,000 & 45,000 \\\hline \text { Current Liabilities } & 77,000 & 53,000 \\\hline \text { Long-term Liabilities } & 34,000 & 51,000 \\\hline \text { Common Stock } & 51,000 & 42,000 \\\hline \text { Retained Earnings } & 41,000 & 28,000 \\\hline\\\hline \text { Net Sales Revenue } & \$ 526,000 & \$ 504,000 \\\hline \text { Cost of Goods Sold } & 400,000 & 398,000 \\\hline \text { Gross Profit } & \$ 126,000 & \$ 106,000 \\\hline \text { Selling Expenses } & 50,000 & 51,000 \\\hline \text { Net Income Before Income Tax Expense } & \$ 76,000 & \$ 55,000 \\\hline \text { Income Tax Expense } & 30,000 & \$ 16,900 \\\hline \text { Net Income } & \$ 46,000 & \$ 38,100 \\\hline\end{array}$ With respect to current liabilities,a horizontal analysis reveals ________.(Round your answer to two decimal places. )

• A)that current liabilities are 37.93% of total equity
• B)a 45.28% increase in current liabilities
• C)a current ratio of 0.88
• D)a 31.17% increase in current liabilities

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Definitions:

Expiratory Reserve Volume (ERV)

The additional amount of air that can be forcibly exhaled after a normal exhalation, reflecting the capacity for voluntary lung deflation beyond passive expiration.

Tidal Inspiration

The normal process of taking air into the lungs during breathing at rest without extra effort.

Tidal Expiration

The process of passive exhaling in the breathing cycle where air is expelled from the lungs due to the natural recoil of the chest and lungs.

Forced Expiration

The act of expelling air from the lungs with effort, beyond the usual passive expiration, often requiring use of additional muscles.