The Following Is a Summary of Information Presented on the Financial

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2007.
$$\begin{array} { | l | r | r | } \hline \text { Account } & 2007 & 2006 \\\hline \text { Current assets } & \$ 65,000 & \$ 50,000 \\\hline \text { Accounts receivable } & 80,000 & 75,000 \\\hline \text { Merchandise inventory } & 50,000 & 40,000 \\\hline \text { Current liabilities } & 75,000 & 50,000 \\\hline \text { Long-term liabilities } & 30,000 & 50,000 \\\hline \begin{array} { l } \text { Common stock (2007: } 5,000 \text { shares; } \\\text { 2006: } 4,000 \text { shares) }\end{array} & 50,000 & 40,000 \\\hline \text { Retained earnings } & 40,000 & 25,000 \\\hline & \\\hline \text { Net sales revenue } & \$ 525,000 & \$ 500,000 \\\hline \text { Cost of goods sold } & 400,000 & \underline{395,000} \\\hline \text { Gross profit } & 125,000 & 105,000 \\\hline \text { Selling and general expenses } & 45,000 & 50,000 \\\hline \text { Net income before income tax expense } & 80,000 & 55,000 \\\hline \text { Income tax expense } & \underline{24,000} & \underline{16,500} \\\hline \text { Net income } & \underline{\$ 56,000} & \$ 38,500 \\\hline\end{array}$$ What would horizontal analysis report with respect to long-term liabilities?

A) Horizontal analysis would report that long-term liabilities decreased by $20,000.
B) Horizontal analysis would report that long-term liabilities decreased by 40%.
C) Both A and B are correct.
D) None of the above is correct.