2. Prepare a horizontal analysis for 2019 using 2018 as the base year. (Decrease

Question

2. Prepare a horizontal analysis for 2019 using 2018 as the base year. (Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.)

FEDERER SPORTS APPAREL Balance Sheet December 31 Year Increase (Decrease) 2019 2018 Amount % Assets Cash $2,327,500 $615,000 Accounts receivable 1,487,500 1,155,000 Inventory 3,185,000 1,680,000 Buildings 12,600,000 12,600,000 Less: Accumulated depreciation (2,100,000) (1,050,000) Total assets $17,500,000 $15,000,000 Liabilities and Stockholders' Equity Accounts payable $1,592,500 $1,890,000 Contingent liability 1,592,500 0 Common stock 7,665,000 7,665,000 Retained earnings 6,650,000 5,445,000 Total liabilities and stockholders' equity      $17,500,000 $15,000,000

Explanation / Answer

2. Prepare a horizontal analysis for 2019 using 2018 as the base year.

FEDERER SPORTS APPAREL Balance Sheet December 31 Year Increase (Decrease) 2019 2018 Amount % Assets Cash $2,327,500 $615,000 1712500 2.8% Accounts receivable 1,487,500 1,155,000 332500 28.8% Inventory 3,185,000 1,680,000 1505000 89.6% Buildings 12,600,000 12,600,000 0 % Less: Accumulated depreciation (2,100,000) (1,050,000) 1050000 100% Total assets $17,500,000 $15,000,000 2500000 16.7% Liabilities and Stockholders' Equity Accounts payable $1,592,500 $1,890,000 -297500 -15.7% Contingent liability 1,592,500 0 1592500 0% Common stock 7,665,000 7,665,000 0 0% Retained earnings 6,650,000 5,445,000 1205000 22.1% Total liabilities and stockholders' equity      $17,500,000 $15,000,000 2500000 16.7%

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