Question

Brief Exercise 14-1 Selected data from the comparative statements of financial position of Steering Ltd. are shown below: Cash Accounts receivable Inventory Property, plant, and equipment Intangible assets 2018 $149,000 596,000 780,000 3,146,000 90,000 $4,761,000 2017 $176,000 402,000 594,000 2,827,000 100,000 $4,099,000 2016 $76,000 453,000 696,000 2,829,000 Total assets $4,054,000 Using horizontal analysis, calculate the percentage of a base-year amount, assuming 2016 is the base year. (Round answers to 1 decimal place, e.g. 5.2%.) 2018 2017 2016 Cash Accounts receivable Inventory Property, plant, and equipment LINK TO TEXT Using horizontal analysis, calculate the percentage change for each year. (Round answers to 1 decimal place, e.g. 5.2%. Enter negative amounts using eith parenthesis e.g. (45.1)%.) 2018 2017 Cash Accounts receivable Inventory Property, plant, and equipment Intangible assets

Answer 1

Ans. 1		2018	2017	2016
	Cash	196.05%	231.58%	100.00%
	Accounts receivable	131.57%	88.74%	100.00%
	Inventory	112.07%	85.34%	100.00%
	Property, plant and equipment	111.21%	99.93%	100.00%
	*Calculations & Explanations: Year 2016 is used as a base year so all ratios will be calculated on the
	base of it and percentage of this year will be 100% of each item.
		2018	2017	2016
	Cash	$149,000 / $76,000 * 100	$176,000 / $76,000 * 100	$76,000 / $76,000 * 100
	Accounts receivable	$596,000 / $453,000 * 100	$402,000 / $453,000 * 100	$453,000 / $453,000 * 100
	Inventory	$780,000 / $696,000 * 100	$594,000 / $696,000 * 100	$696,000 / $696,000 * 100
	Property, plant and equipment	$3,146,000 / $2,829,000 * 100	$2,827,000 / $2,829,000 * 100	$2,829,000 / $2,829,000 * 100
Ans. 2		2018	2017
	Cash	-15.3%	131.6%
	Accounts receivable	48.3%	-11.3%
	Inventory	31.3%	-14.7%
	Property, plant and equipment	11.3%	-0.1%
	Intagible assets	-10.0%
	*Calculations for Percentage change in 2018:
		2017	2018	Change in amount	Change in Percentage
	Cash	$176,000	$149,000	($27,000)	-15.3%
	Accounts receivable	$402,000	$596,000	$194,000	48.3%
	Inventory	$594,000	$780,000	$186,000	31.3%
	Property, plant and equipment	$2,827,000	$3,146,000	$319,000	11.3%
	Intagible assets	$100,000	$90,000	($10,000)	-10.0%
	Change in amount = Particular amount of current year 2018 - Particular amount of previous year 2017
	Change in percentage = Change in amount / particular amount of base (2017) or previous year * 100
	*Calculations for Percentage change in 2017:
		2016	2017	Change in amount	Change in Percentage
	Cash	$76,000	$176,000	$100,000	131.6%
	Accounts receivable	$453,000	$402,000	($51,000)	-11.3%
	Inventory	$696,000	$594,000	($102,000)	-14.7%
	Property, plant and equipment	$2,829,000	$2,827,000	($2,000)	-0.1%
	Change in amount = Particular amount of current year 2017 - Particular amount of previous year 2016
	Change in percentage = Change in amount / particular amount of base (2016) or previous year * 100