1. Prepare a vertical analysis of the balance sheet data for 2019 and 2018. Expr
ID: 2561845 • Letter: 1
Question
1. Prepare a vertical analysis of the balance sheet data for 2019 and 2018. Express each amount as a percentage of Round your answers to 1 decimal place.) 2019 2018 Amount Assets Cash Accounts receivable Inventory Buildings Less: Accumulated depreciation $2,200,000 1,237,500 3,112,500 7.150,000 (1200.000) $ 12,500,000 17.6 800,000 990,000 1,660,000 7,150,000 (600,000) 100.0$ 10,000,000 9.9 2.5 5.7 (9.6) 0.8 0.9 1.6 7.1 0.6 100.0 Total assets Liabilities and Stockholders' Equity Accounts payable Contingent liability Common stock Retained earnings S1,250,000 $ 1,512,500 850,000 5,050,000 5,087.500 Total liabilities and stockholders equity S 12.500,000 5,050,000 3,700,000 1000 S 10000,000 100.0Explanation / Answer
Answera:
(1)
Vertical Analysis
FEDERER SPORTS APPAREL
Balance Sheet
31-Dec
2019
2018
Amount
%
Amount
%
Assets
Cash
$2,200,000
17.60%
$800,000
8.00%
Accounts receivable
1,237,500
9.90%
990,000
9.90%
Inventory
3,112,500
24.90%
1,660,000
16.60%
Buildings
7,150,000
57.20%
7,150,000
71.50%
Less: Accumulated depreciation
-1,200,000
-9.60%
-600,000
-6.00%
Total assets
$12,500,000
100.00%
$10,000,000
100.00%
Liabilities and Stockholders' Equity
Accounts payable
$1,512,500
12.10%
$1,250,000
12.50%
Contingent liability
850,000
6.80%
0
0.00%
Common stock
5,050,000
40.40%
5,050,000
50.50%
Retained earnings
5,087,500
40.70%
3,700,000
37.00%
Total liabilities and stockholders’ equity
$12,500,000
100.00%
$10,000,000
100.00%
(2)
Horizontal analysis
FEDERER SPORTS APPAREL
Balance Sheet
31-Dec
2019
2018
increase (decrease)
Amount
Amount
%
Assets
Cash
$2,200,000
$800,000
$1,400,000
175.00%
Accounts receivable
1,237,500
990,000
$247,500
25.00%
Inventory
3,112,500
1,660,000
$1,452,500
87.50%
Buildings
7,150,000
7,150,000
$0
0.00%
Less: Accumulated depreciation
-1,200,000
-600,000
($600,000)
100.00%
Total assets
$12,500,000
$10,000,000
$2,500,000
25.00%
Liabilities and Stockholders' Equity
Accounts payable
$1,512,500
$1,250,000
$262,500
21.00%
Contingent liability
850,000
0
$850,000
Common stock
5,050,000
5,050,000
$0
0.00%
Retained earnings
5,087,500
3,700,000
$1,387,500
37.50%
Total liabilities and stockholders’ equity
$12,500,000
$10,000,000
$2,500,000
25.00%
FEDERER SPORTS APPAREL
Balance Sheet
31-Dec
2019
2018
Amount
%
Amount
%
Assets
Cash
$2,200,000
17.60%
$800,000
8.00%
Accounts receivable
1,237,500
9.90%
990,000
9.90%
Inventory
3,112,500
24.90%
1,660,000
16.60%
Buildings
7,150,000
57.20%
7,150,000
71.50%
Less: Accumulated depreciation
-1,200,000
-9.60%
-600,000
-6.00%
Total assets
$12,500,000
100.00%
$10,000,000
100.00%
Liabilities and Stockholders' Equity
Accounts payable
$1,512,500
12.10%
$1,250,000
12.50%
Contingent liability
850,000
6.80%
0
0.00%
Common stock
5,050,000
40.40%
5,050,000
50.50%
Retained earnings
5,087,500
40.70%
3,700,000
37.00%
Total liabilities and stockholders’ equity
$12,500,000
100.00%
$10,000,000
100.00%
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