Gingerbread inc. reported the following selected financial information for 2019: net sales $850,000 gross profit 450,000 net income 200,000 total assets 1,875,000 accounts payable 245,000 total liabilities 1,200,000 if gingerbread were preparing a vertical analysis, what percentage would be reported for accounts payable on the balance sheet?

Accounts payable would be 20.42% of the balance sheet , when preparing a vertical analysis.

Explanation:

In the question it is told that Ginger bread is doing a vertical analysis, where when we have to calculate the percentage of certain item of the balance sheet , we will use formula -

 ( Balance sheet item / Total liability ) x 100

Given information - Accounts payable = $245,000

                                Total liabilities = $1200,000

Putting these values in formula -

= $245,000 / $1200,000   X 100

= .20416 X 100

= 20.416

= 20.42% ( APPROXIMATELY )

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