Perform a vertical analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { | l l | }
\hline \text { Assets } & \
\hline \text { Current Assets } & \$ 13,000 \
\text { Cash } & 26,000 \
\text { Accounts Receivables } & 40,000 \
\text { Merchandise Inventory } & 2,000 \
\text { Supplies } & 81,000 \
\text { Total Current Assets } & \
\text { Property, Plant, and Equipment } & 13,000 \
\text { Machinery and Equipment } & \$ 94,000 \
\text { Total Assets } &
\end{array}$$
A) 42.6%
B) 13.8%
C) 37.7%
D) 27.7%

Question

Perform a vertical analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { | l l | } 
\hline \text { Assets } & \
\hline \text { Current Assets } & \$ 13,000 \
\text { Cash } & 26,000 \
\text { Accounts Receivables } & 40,000 \
\text { Merchandise Inventory } & 2,000 \
\text { Supplies } & 81,000 \
\text { Total Current Assets } & \
\text { Property, Plant, and Equipment } & 13,000 \
\text { Machinery and Equipment } & \$ 94,000 \
 \text { Total Assets } &
\end{array}$$
A) 42.6%
B) 13.8%
C) 37.7%
D) 27.7%

Quizplus · Accepted Answer

To perform a vertical analysis, divide the "Accounts Receivable" amount by the "Total Assets" amount. Total Assets = Current Assets + Property, Plant, and Equipment = $13,000 + $94,000 = $107,000. Accounts Receivable = $40,000. Vertical analysis percentage = ($40,000 / $144,000) * 100 = 27.7%.

Perform a Vertical Analysis for the Balance Sheet Entry "Accounts