Simulation $12-32($Static$)[$LO $12-5,12-6]$

Andy Watson, CPA, is a senior auditor on the audit of Carlson Incorporated. Andy is reviewing the results of analytical procedures related to inventory. For results $($a$),($b$),$ and $($c$),$ select the explanation that is most likely to be consistent with the change described.

$(1)$ Inventory increased as of year$-$end.

$(2)$ Debt outstanding increased.

$(3)$ A larger percentage of sales occurred during the last month of $20$X$8,$ as compared to $20$X$7.$

$(4)$ Interest expense increased during $20$X$8$ due to the acquisition of new debt.

$(5)$ The percentage of tax included in the provision for income taxes for $20$X$8$ is less than the percentage used in $20$X$7.$

$(6)$ Increases in costs of purchases were not completely passed on to customers through higher selling prices.

$(7)$ Owners$$ equity increased due to retention of profits.

$(8)$ Interest expense increased during $20$X$8.$

$(9)$ A significant amount of long$-$term debt became current at the end of $20$X$8.$