Exercise 14.1
Selected information taken from the financial statements of Maxum Company for two successive years follows. You are to compute the percentage change from 2010 to 2011 whenever possible. Round all calculations to the nearest whole percentage. 2010 2011 a. Accounts receivable…………………………………………… $126,000 $160,000 b. Marketable securities………………………………...……….. - 0 - 250,000 c. Retained earnings………………………………...…………… 80,000 (80,000) d. Notes receivable……………………………………..……….. 120,000 - 0 - e. Notes payable…………………………………………………. 870,000 800,000 f. Cash………………………………………………………..…... 84,000 80,000 g. Sales………………………………………………………...….. 970,000 910,000

a. (126,000-160,000) / 160,000 x 100 = -21% b. (0-250,000) / 250,000 x 100 = -100% c. Computation of the percentage change is not appropriate. d. Computation of the percentage change is not appropriate. e. (870,000-800,000) / 800,000 x 100 = 9% f. (84,000-80,000) / 80,000 x 100 = 5% g. (970,000-910,000) / 910,000 x 100 = 7%

Exercise 14.2
Compute trend percentages for the following items taken from the financial statements of Lopez Plumbing over a five-year period. Treat 2007 as the base year. State whether the trends are favorable or unfavorable. (Dollar amounts are stated in thousands).
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2011 2010 2009 2008 2007
Sales……………………….. $81,400 $74,000 $61,500 $59,000 $50,000
Cost of goods sold……….. 58,500 48,000 40,500 37,000 30,000

------------------------------------------------- 2011 2010 2009 2008 2007
Sales……………………….. 163% 148% 123% 118%
Cost of goods sold……….. 195% 160% 135% 123% Favorable Favorable Favorable Favorable

Problem 14.6A
Shown below is selected information from the