The comparative accounts payable and long-term debt balances for a company follow.

Question

Line Item Description Current Year Previous Year
Accounts payable $68,757 $55,900
Long-term debt 26,207 35,900
Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Enter all answers as positive numbers.

Line Item Description Amount of Change Increase/Decrease Percentage
Accounts payable $fill in the blank 1

fill in the blank 3
%
Long-term debt $fill in the blank 4

fill in the blank 6
%

Answer 1

To perform a horizontal analysis, we need to calculate the amount of change and the percentage change for both accounts payable and long-term debt.

For Accounts Payable

1. Amount of Change: \[ \text{Amount of Change} = \text{Current Year} - \text{Previous Year} \] \[ = 68,757 - 55,900 = 12,857 \]

2. Percentage Change: \[ \text{Percentage Change} = \left( \frac{\text{Amount of Change}}{\text{Previous Year}} \right) \times 100 \] \[ = \left( \frac{12,857}{55,900} \right) \times 100 \approx 23.0% \]

For Long-Term Debt

1. Amount of Change: \[ \text{Amount of Change} = \text{Current Year} - \text{Previous Year} \] \[ = 26,207 - 35,900 = -9,693 \]

2. Percentage Change: \[ \text{Percentage Change} = \left( \frac{\text{Amount of Change}}{\text{Previous Year}} \right) \times 100 \] \[ = \left( \frac{-9,693}{35,900} \right) \times 100 \approx -27.0% \]

Final Results

• For Accounts Payable:

  • Amount of Change: 12,857
  • Percentage: 23.0

• For Long-Term Debt:

  • Amount of Change: 9,693 (entering as a positive number for all answers)
  • Percentage: 27.0 (entering as a positive number for all answers)

Fill in the blanks

• Accounts payable:

  • Amount of Change: 12,857 (fill in the blank 1)
  • Percentage: 23.0 % (fill in the blank 3)

• Long-term debt:

  • Amount of Change: 9,693 (fill in the blank 4)
  • Percentage: 27.0 % (fill in the blank 6)