Allstate Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: $$\begin{array} { | l | r | r | }
\hline & { 2019 } & { 2018 } \
\hline \text { Cash and Receivables } & \$ 75,000 & \$ 145,000 \
\hline \text { Merchandise Inventory } & 175,000 & 250,000 \
\hline \text { Property, Plant and Equipment, net } & 820,000 & 710,000 \
\hline \text { Total Assets } & \$ 1,070,000 & \$ 1,105,000 \
\hline \text { Total Liabilities } & \$ 455,000 & \$ 405,000 \
\hline
\end{array}$$ For the vertical analysis, what is the percentage of current assets as of December 31, 2019? (Round your answer to two decimal places.)
A) 23.36%
B) 35.75%
C) 55.63%
D) 30.49%

Question

Allstate Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: $$\begin{array} { | l | r | r | } 
\hline & { 2019 } &  { 2018 } \
\hline \text { Cash and Receivables } & \$ 75,000 & \$ 145,000 \
\hline \text { Merchandise Inventory } & 175,000 & 250,000 \
\hline \text { Property, Plant and Equipment, net } & 820,000 & 710,000 \
\hline \text { Total Assets } & \$ 1,070,000 & \$ 1,105,000 \
\hline \text { Total Liabilities } & \$ 455,000 & \$ 405,000 \
\hline
\end{array}$$ For the vertical analysis, what is the percentage of current assets as of December 31, 2019? (Round your answer to two decimal places.)
A) 23.36%
B) 35.75%
C) 55.63%
D) 30.49%

Quizplus · Accepted Answer

Vertical analysis is a financial statement analysis technique that expresses each item in a financial statement as a percentage of a base figure within the statement. In this case, the base figure is total assets.To calculate the percentage of current assets as of December 31, 2019, we need to divide the total current assets by the total assets and multiply by 100.Total current assets = Cash and Receivables + Merchandise InventoryTotal current assets = $75,000 + $175,000 = $250,000Percentage of current assets = (Total current assets / Total assets) x 100Percentage of current assets = ($250,000 / $1,070,000) x 100Percentage of current assets = 23.36%Therefore, the percentage of current assets as of December 31, 2019 is 23.36%.

Allstate Moving Company Reported the Following Amounts on Its Balance