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9 January, 17:17

American Corporation has the following financial information. Year 1 Year 2 Cash $ 202.95 $ 245.90 A/R 398.02 485.34 Inventory 785.12 648.54 If Year 1 is the base year, what is the percentage increase/decrease of each current asset amount

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  1. 9 January, 20:16
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    Answer: The answer is given below

    Explanation:

    Since Year 1 has been given as the base year, the percentage change will be:

    (Year 2 - Year 1) / Year 1 * 100

    Cash:

    = (245.90 - 202.95) / 202.95 * 100

    = 42.95/202.95 * 100

    = 0.21 * 100

    = 21% Increase

    A/R:

    = (485.34 - 398.02) / 398.02 * 100

    = 87.32/398.02 * 100

    = 0.22 * 100

    = 22% Increase

    Inventory:

    = (648.54 - 785.12) / 785.12 * 100

    = - 136.58/785.12 * 100

    = - 0.17 * 100

    = 17% decrease
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