Question

Prepare a horizontal analysis of both the balance sheet and income statement.

Prepare a horizontal analysis of the balance sheet. (Negative answers should be indicated by a minus sign. Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4).)

THORNTON COMPANY Horizontal Analysis of Balance Sheets 2019 2018 Percentage Change Assets Current assets Cash $16,700 $12,200 % Marketable securities 21,300 7,500 Accounts receivable (net) 54,100 46,500 Inventories 136,100 144,600 Prepaid items 26,300 10,400 Total current assets 254,500 221,200 Investments 27,100 20,100 Plant (net) 271,400 255,700 Land 30,000 24,500 Total long-term assets 328,500 300,300 Total assets $583,000 $521,500 Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $15,800 $4,700 Accounts payable 113,100 98,400 Salaries payable 20,600 13,800 Total current liabilities 149,500 116,900 Noncurrent liabilities Bonds payable 98,500 98,500 Other 30,900 26,800 Total noncurrent liabilities 129,400 125,300 Total liabilities 278,900 242,200 Stockholders' equity Preferred stock (par value $10, 4% cumulative, nonparticipating; 6,600 shares authorized and issued) 66,000 66,000 Common stock (no par; 50,000 shares authorized; 10,000 shares issued) 66,000 66,000 Retained earnings 172,100 147,300 Total stockholders' equity 304,100 279,300 Total liabilities & stockholders’ equity $583,000 $521,500    %

Prepare a horizontal analysis of the income statement. (Negative answers should be indicated by a minus sign. Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4).)

THORNTON COMPANY Horizontal Analysis of Income Statements 2019 2018 Percentage Change Revenues Sales (net) $230,600 $210,900 % Other revenues 10,000 6,800 Total revenues 240,600 217,700    Expenses Cost of goods sold 118,100 101,100 Selling, general, and administrative expenses 53,300 48,400 Interest expense 7,500 6,700 Income tax expense 22,400 21,400 Total expenses 201,300 177,600 Net income (loss) $39,300 $40,100 %

Answer 1

THORNTON COMPANY
Horizontal Analysis of Balance Sheets
	2019	2018	Percentage Change
Assets
Current assets
Cash	$   16,700.00	$   12,200.00	36.9%
Marketable securities	$   21,300.00	$     7,500.00	184.0%
Accounts receivable (net)	$   54,100.00	$   46,500.00	16.3%
Inventories	$1,36,100.00	$1,44,600.00	-5.9%
Prepaid items	$   26,300.00	$   10,400.00	152.9%
Total current assets	$2,54,500.00	$2,21,200.00	15.1%
Investments	$   27,100.00	$   20,100.00	34.8%
Plant (net)	$2,71,400.00	$2,55,700.00	6.1%
Land	$   30,000.00	$   24,500.00	22.4%
Total long-term assets	$3,28,500.00	$3,00,300.00	9.4%
Total assets	$5,83,000.00	$5,21,500.00	11.8%
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Notes payable	$   15,800.00	$     4,700.00	236.2%
Accounts payable	$1,13,100.00	$   98,400.00	14.9%
Salaries payable	$   20,600.00	$   13,800.00	49.3%
Total current liabilities	$1,49,500.00	$1,16,900.00	27.9%
Noncurrent liabilities
Bonds payable	$   98,500.00	$   98,500.00	0.0%
Other	$   30,900.00	$   26,800.00	15.3%
Total noncurrent liabilities	$1,29,400.00	$1,25,300.00	3.3%
Total liabilities	$2,78,900.00	$2,42,200.00	15.2%
Stockholders' equity
Preferred stock (par value $10, 4% cumulative, nonparticipating; 6,600 shares authorized and issued)	$   66,000.00	$   66,000.00	0.0%
Common stock (no par; 50,000 shares authorized; 10,000 shares issued)	$   66,000.00	$   66,000.00	0.0%
Retained earnings	$1,72,100.00	$1,47,300.00	16.8%
Total stockholders' equity	$3,04,100.00	$2,79,300.00	8.9%
Total liabilities & stockholders’ equity	$5,83,000.00	$5,21,500.00	11.8%

THORNTON COMPANY
Horizontal Analysis of Income Statements
	2019	2018	Percentage Change
Revenues
Sales (net)	$2,30,600.00	$2,10,900.00	9.3%
Other revenues	$   10,000.00	$     6,800.00	47.1%
Total revenues	$2,40,600.00	$2,17,700.00	10.5%
Expenses
Cost of goods sold	$1,18,100.00	$1,01,100.00	16.8%
Selling, general, and administrative expenses	$   53,300.00	$   48,400.00	10.1%
Interest expense	$     7,500.00	$     6,700.00	11.9%
Income tax expense	$   22,400.00	$   21,400.00	4.7%
Total expenses	$2,01,300.00	$1,77,600.00	13.3%
Net income (loss)	$   39,300.00	$   40,100.00	-2.0%