Question

Payne Company's sales and current assets have been reported as follows over the last four years:

		Year 4	Year 3	Year 2	Year 1
	Sales.................................	$810,000	$720,000	$630,000	$600,000
	Cash.................................	$ 36,000	$ 30,000	$ 25,000	$ 20,000
	Accounts receivable.........	74,000	60,000	59,200	50,000
	Inventory.........................	77,800	72,000	90,000	80,000
	Prepaid expenses..............	46,200	38,000	10,800	30,000
	Total current assets..........	$234,000	$200,000	$185,000	$180,000

Suppose that Payne Company employs trend percentages to analyze performance with Year 1 as the base year. Sales for Year 4 expressed as a trend percentage would be closest to:

Question 18 options:

	128.6%
	74.1%
	112.5%
	135.0%

Answer 1

Answer The Correct Option is 135.0% Explanations Calculation of Sales for Year 4 expressed as a trend percentage would be closest to Sales as trend percentage = Year 4 sales / Year 1 sales = $810,000 / $600,000 = 135.0%