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CP13-1 Analyzing Comparative Financial Statements Using Horizontal Analyses LO 13-22, 13-50 Golden Corporation declared and paid $3,000 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Previous Current Previous Amount Percentage $180,000 110,000 70.000 Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense Income before income taxes Income tax expense Net income Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) 53,300 2,700 14.000 4,000 $ 10,000 $165,000 100,000 65.000 50,400 2,600 12,000 3,000 $ 9.000 $ 4,000 19.000 40.000 Current liabilities Note payable (long-term) Common stock (par $5) Additional paid-in capital Retained earnings 45,000 $108,000 $ 16,000 45,000 30,000 5,000 12.000 $ 8,000 23,000 35,000 38,000 $104.000 $ 19,000 45,000 30,000 5,000 5.000 $104,000 $108,000 Required: Page 639 1. Complete the two final columns shown beside each item in Golden Corporation's comparative financial statements. Round the percentages to one decimal place. TIP: Calculate the increase (decrease) by subtracting the previous year from the current year. Calculate the percentage by dividing the amount of increase (decrease) by the previous year balance. 2. Use the horizontal (trend) analyses to identify (a) a large percentage change in one account that is accompanied by a small dollar change and (b) a directional change in one account balance that is inconsistent with the direction of change in a related account balance

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