1 Compute the annual dollar changes and percent changes for each of the following accounts. (Decreases should be indicated with a minus sign. Round percent change to one decimal place.) Short-term investments Accounts receivable Nates payable Current Year Prior Year $375, 686 $ 234,966 98,998 102,322 O B9, 147 5 points eBook References Horizontal Analysis - Calculation of Percent Change Choose Numerator: Choose Denominator: Percent Change = Current Year Amount 1 Base Year minus Current Year Current Year Prior Year Dollar Change Short-term investments 375,686 S 234,966 $ 140,720 Accounts receivable 98,998 102,322 (3,324) Notes payable 0 89,147 89,147 Percent Change 59.8 % (3.2) % (100.0 % 2 Determine the Prior Year and Current Year common-size percents for cost of goods sold using net sales as the base. (Enter the answers in thousands of dollars.) Prior ($ thousands ) Net sales Cost of goods sold Current Year Year SBO2,615 $453,810 393,781 134,816 5 points eBook References Common-Size Percent for Cost of Goods Sold using Net Sales as the base: Choose Numerator: 1 Choose Denominator: Analysis period cost of goods sold Analysis period net sales Common-Size Percents S 393,781 $ 802,615 = 49.06 % S 134,816 $ 453,810 = 29.71 % Current Year: Prior Year: 3 Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? 10 points Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) eBook References GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ $ 755,000 100.0 $ 645,000 568,100 77.3 288,800 186,900 356,200 129,200 17.3 276.800 $ 57,700 8.6 $ 79,400 100.0 Sales Cost of goods sold Gross profit Operating expenses Net income 3 Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Statement Reason for Decline in Net Income 10 points Using the common-size percentages, which item most responsible for the decline in net income? eBook 4 Common stock, $10 par value Retained earnings Total liabilities and equity 163,500 127,800 $ 522,643 163,500 163,500 106, 246 76,931 $ 450,554 $ 368,100 10 points 1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.) 2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? 3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable? eBook References Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Assuming annual sales have not changed in the last three years, is the change accounts receivable as a percentage of total assets favorable or unfavorable? Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable? Show less A 2. Change in accounts receivable Change merchandise inventory 3. aq 2 and 3 unfavorable development. favourable development