Chapter 16, Problem 3EA

Summary financial information for Gandaulf Company is as follows. Compute the amount and percentage changes in 2022 using horizontal analysis, assuming 2024 is the base year. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45,-45% or parentheses e.g. (45), (45%). Round percentages to 2 decimal places, e.g. 1.25%.) Current Assets Dec. 31, 2022 Dec. 31, 2024 $191,100 $210,000 $ Plant Assets 1,058,600 790,000 Total assets $1,249,700 $1,000,000 $ Increase (Decrease) in 2022 Amount Percent % % %

Your answer is partially correct.  Try again.     Using these data from the comparative balance sheet of Cullumber Company, perform horizontal analysis. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 0 decimal places, e.g. 12%.)             Increase or (Decrease)     Dec. 31, 2022   Dec. 31, 2021   Amount   Percentage Accounts receivable   $ 608,400   $ 520,000   $Enter increase or decrease amount in dollars.     Enter increase or decrease in percentages rounded to 0 decimal places.    % Inventory   $ 931,700   $ 770,000   $Enter increase or decrease amount in dollars.     Enter increase or decrease in percentages rounded to 0 decimal points.    % Total assets   $3,381,000   $2,940,000   $Enter increase or decrease amount in dollars.     Enter increase or decrease in percentages rounded to 0 decimal points.    %

Perez Company reported an increase in inventories in thepast year. Discuss the effect of this change on the currentratio (current assets ÷ current liabilities). What does thistell a statement user about Perez Company’s liquidity?