Last year, which is used as the base year, a firm had cash of $60, accounts receivable of $100, inventory of $200, and fixed assets of $500. This year the firm has cash of $50, accounts receivable of $150, inventory of $250, and fixed assets of $550. What is the common-base year value of accounts receivable?
A) .12
B) .15
C) .67
D) 1.16
E) 1.50

Question

Quizplus · Accepted Answer

The common-base year value of an account is calculated by taking the current year's value and dividing it by the base year's value. For accounts receivable, this year it is $150 and last year (the base year) it was $100. Therefore, the common-base year value is $150 / $100 = 1.50.

Last Year, Which Is Used as the Base Year, a Firm