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Question
Comparative information taken from Friction Company's financial statements is as follows:
| Year 2 | Year 1 | ||
| a. | Notes receivable | $ 25,500 | $ 30,000 |
| b. | Accounts receivable | 106,200 | 90,000 |
| c. | Retained earnings | 77,000 | 70,000 |
| d. | Sales | 654,000 | 600,000 |
| e. | Operating expenses | 160,000 | 200,000 |
| f. | Income taxes payable | 28,000 | 20,000 |
Using horizontal analysis, show the percentage change and direction (increase or decrease) from Year 1 to Year 2 with Year 1 as the base year.
Answer
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