Question

Account	Current Year	Prior Year
Net sales (all credit)	$445,400	$362,000
Costs of goods sold	$220,000	$185,000
Gross profit	$225,400	$177,000
Income from operations	$72,000	$80,000
Interest expense	$8,000	$14,000
Net income	$40,000	$35,000
Cash	$34,000	$28,000
Accounts receivable, net	$42,000	$62,000
Inventory	$120,000	$100,000
Prepaid expenses	$4,000	$2,000
Total current assets	$200,000	$192,000
Total long-term assets	$200,000	$230,000
Total current liabilities	$100,000	$165,000
Total long-term liabilities	$44,000	$95,000
Common stock, no par, $8,000 shares, value $120/share	$80,000	$80,000

What balance sheet account changed the most from last year to this year? (as a %) Show work + explanation

What income statement account changed the most from last year to this year? (as a %) Show work + explanation

Answer 1

Precentage Chane Account Current Year (A) Prior Year (B) Absolute Change (C) = (A-B) = C/B X 100 Income statement account: Net sales (all credit) $445,400 $362,000 $83,400 23.04% Costs of goods sold $220,000 $185,000 $35,000 18.92% Gross profit $225,4001 $177,000 $48,400 27.34% Income from operations $72,000 $80,000 ($8,000) -10.00% $8,000 $40,000 $14,000 $35,000 ($6,000) $5,000 -42.86% 14.29% Interest expense Net income Balance Sheet Accounts: Cash $34,000 $28,000 $6,000 21.43% Accounts receivable, net Inventory Prepaid expenses $42.000 $120,000 $62,000 $100,000 ($20,000) $20,000 -32.26% 20.00% $4,000 $2,000 $2,000 100.00% Total current assets $200,000 $192,000 $8,000 4.17% Total long-term assets $200,000 $230,000 ($30,000) -13.04% Total current liabilities $100,000 $165,000 ($65,000) -39.39% Total long-term liabilities $44,000 $95,000 ($51,000) -53.68% Common stock, no par, $8,000 shares, value $120/share $80,000 $80,000 0.00% For the above is can be seen that the Prepaid expense got doubled from 2000 to 4000 making a change of 100% Prepaid expense from balance sheet account makes the highest change in terms of percentage. For the above it can be seen that the Interest expense decreased by 42.86% which is the highest percentage change in the income statement. Interest expense from the income statement account makes the highest change in terms of percentage.