Question

Reliable Moving Company reported the following amounts on its balance sheet as of December​ 31, 2019 and December​ 31, 2018: 2019 2018 Cash and Receivables $95,000 $155,000 Merchandise Inventory 225,000 250,000 Property, Plant and​ Equipment, net 750,000 770,000 Total Assets $1,070,000 $1,175,000 Total Liabilities $465,000 $395,000 For the vertical​ analysis, what is the percentage of total liabilities for December​ 31, 2018?​

Answer 1

Answer:

33.61%

Explanation:

Reliable Moving Company calculation of percentage of total liabilities for December​ 31, 2018

Using this formula

Vertical analysis % = Specific item / Base amount × 100Vertical analysis %

Where:

Specific item =$395,000

Base amount =$1,175,000

Thus:

= ($395,000 / $1,175,000) × 100Vertical analysis %

=0.33617×100 Vertical analysis %

2018 Percentage of total liabilities= 33.61%