The following is summary of information presented The follow

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

Solution

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)