21) Given the following data:
Current liabilities
$450,000
Noncurrent liabilities
650,000
Stockholders’ equity
500,000
In vertical analysis, current liabilities would be expressed as:
A) 356%.
B) 90%.
C) 111%.
D) 28%.
22) In performing a vertical analysis, the base for sales returns and allowances is:
A) sales discounts.
B) sales.
C) gross profit.
D) net sales.
23) In performing a vertical analysis, the base for cost of goods sold is:
A) net sales.
B) total revenues.
C) total expenses.
D) gross profit.
24) Given the following data:
Cash
$225,000
Current assets
970,000
Total assets
2,105,000
In a vertical analysis, cash would be expressed as:
A) 935%.
B) 217%.
C) 46%.
D) 11%.
25) If a balance sheet is subjected to vertical analysis which shows that current assets (using total assets as the base) have increased from 42% to 56%, this would always mean that:
A) current assets have increased as a percentage of total assets.
B) the dollar amount of total assets has increased.
C) the dollar amount of total assets has decreased.
D) the dollar amount of current assets has increased.
26) Given the following data:
Net sales
200,000
Cost of goods sold
120,000
Gross profit
80,000
In a vertical analysis, cost of goods sold would be expressed as:
A) 166%.
B) 40%.
C) 60%.
D) 250%.
27) Given the following data:
Net sales
200,000
Cost of goods sold
120,000
Gross profit
$80,000
Operating expenses
44,000
Net income
36,000
In a vertical analysis, net income would be expressed as:
A) 18%.
B) 45%.
C) 30%.
D) 82%.
28) If the assets shown on a balance sheet are subjected to vertical analysis (using total assets as the base), an increase in the figure for current assets from 56% to 60% would always mean that:
A) the dollar amount of noncurrent assets has increased.
B) the dollar amount of total assets has increased.
C) total current assets have increased as a percentage of total assets.
D) the dollar amount of current assets has increased.
29) Prepare a vertical analysis for Winkler Corporation using the information shown below (round percentages to the nearest one-tenth percent):
2012
Sales
$450,000
Cost of goods sold
200,000
Gross profit
250,000
Operating expenses
118,000
Net income
132,000
30) Prepare a vertical analysis for Crestwood Corporation’s balance sheet to determine the component percentages of its assets, liabilities, and stockholders’ equity. Round percentages to the nearest one-tenth percent.
31) Prepare a vertical analysis for Westwood Corporation by completing the right column of the following balance sheet with the appropriate percentages. Round percentages to the nearest one-tenth percent.
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