The following is summary of information presented The following is summary of in

Question

The following is summary of information presented The following is summary of information presented on the financial statements of a company on December 31, 2017. With respect to current liabilities, a horizontal analysis reveals (Round your answer to two decimal places.) 2016 $52 Account Cument Assets Accounts Receivable Merchandise Inventory Cument Liabilities Long-tem Liabilities Common Stock Retained Eamings 2017 85 79 51 69.00 78.000 40 Net Sales Revenue Cost of Goods Sold Gross Proft Sellin Net Income Before Income Tax Espense 5527.000 $502.000 S123 $104 $77 $47 ome lax ense Net Income Minimized View O A. that current liabilities are 37.98% of total equity O B. a 38.60% increase in current liabilities a current ratio of 0.87 D. a 27.85% increase in current liabilities

Explanation / Answer

Answer: B

This is the analysis of comparison data between the years.

Current liabilities increase = Figure of 2017 – Figure of 2016

                                            = 79,000 – 57,000

                                            = $22,000

Percentage increase = (Current liabilities increase / current liabilities in 2016) × 100

                                 = ($22,000 / $57,000) × 100

                                 = 38.596 ….. %

                                 = 38.60% (rounded)

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