Waller Company does business in two regional segments: North and South. The following annual revenue information was determined from the accounting system's invoice information: Using horizontal analysis, determine the percentage change in revenues for the North region.
Round to one decimal place.

Question

Waller Company does business in two regional segments: North and South. The following annual revenue information was determined from the accounting system's invoice information:  Using horizontal analysis, determine the percentage change in revenues for the North region.
Round to one decimal place.

Quizplus · Accepted Answer

To calculate the percentage change in revenues for the North region, we need to compare the current year revenue with the previous year revenue and determine the percentage change. The formula for horizontal analysis is:

(Current Year Amount - Previous Year Amount) / Previous Year Amount x 100

Using the given data, if we assume the first year as the previous year and the second year as the current year, we can calculate the percentage change for the North region as:

(1,800,000 - 2,400,000) / 2,400,000 x 100 = -25%

The negative sign indicates a decrease in revenue for the North region. Therefore, the correct choice is B. (25.0%) with a negative sign to indicate a decrease.

Waller Company Does Business in Two Regional Segments: North and South