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).)

ADAMS COMPANY Horizontal Analysis of Balance Sheets 2019 2018 Percentage Change Assets Current assets Cash $16,700 $12,100 % Marketable securities 20,200 7,400 Accounts receivable (net) 54,900 47,600 Inventories 135,200 144,500 Prepaid items 25,000 10,500 Total current assets 252,000 222,100 Investments 29,000 21,000 Plant (net) 270,900 255,700 Land 29,800 25,500 Total long-term assets 329,700 302,200 Total assets $581,700 $524,300 Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $15,800 $4,000 Accounts payable 113,000 98,200 Salaries payable 20,600 13,500 Total current liabilities 149,400 115,700 Noncurrent liabilities Bonds payable 98,600 98,600 Other 31,100 26,500 Total noncurrent liabilities 129,700 125,100 Total liabilities 279,100 240,800 Stockholders' equity Preferred stock (par value $10, 4% cumulative, nonparticipating; 8,000 shares authorized and issued) 80,000 80,000 Common stock (no par; 50,000 shares authorized; 10,000 shares issued) 80,000 80,000 Retained earnings 142,600 123,500 Total stockholders' equity 302,600 283,500 Total liabilities & stockholders’ equity $581,700 $524,300 %

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).)

ADAMS COMPANY Horizontal Analysis of Income Statements 2019 2018 Percentage Change Revenues Sales (net) $230,800 $211,000 % Other revenues 9,100 6,000 Total revenues 239,900 217,000 Expenses Cost of goods sold 118,100 102,000 Selling, general, and administrative expenses 54,300 50,000 Interest expense 7,200 6,400 Income tax expense 22,700 21,700 Total expenses 202,300 180,100 Net income (loss) $37,600 $36,900 %

Answer 1

Answer-

ADAMS COMPANY
HORIZONTAL ANALYSIS
Particulars	2019	2018	Increase/(Decrease)	Percent
	$	$	$	%
ASSETS
Current Assets
Cash	16700	12100	4600	38.0
Maketable securities	20200	7400	12800	173.0
Accounts Receivable (Net)	54900	47600	7300	15.3
Inventories	135200	144500	-9300	-6.4
Prepaid items	25000	10500	14500	138.1
Total current assets	252000	222100	29900	13.5
Investments	29000	21000	8000	38.1
Plant (net)	270900	255700	15200	5.9
Land	29800	25500	4300	16.9
Total long-term assets	329700	302200	27500	9.1
Total Assets	581700	524300	57400	10.9
LIABILITIES
Current liabilities
Notes payable	15800	4000	11800	295.0
Accounts payable	113000	98200	14800	15.1
Salaries payable	20600	13500	7100	52.6
Total current liabilities	149400	115700	33700	29.1
Noncurrent liabilities
Bonds payable	98600	98600	0	0.0
Other	31100	26500	4600	17.4
Total noncurrent liabilities	129700	125100	4600	3.7
Total liabilities	279100	240800	38300	15.9
Stockholders' Equity
Preferred stock	80000	80000	0	0.0
Common stock	80000	80000	0	0.0
Retained Earnings	142600	123500	19100	15.5
Total stockholder's eqity	302600	283500	19100	6.7
Total liabilities & stockholder's eqity	581700	524300	57400	10.9

Answer-

ADAMS COMPANY
Comparative Income Statement
HORIZONTAL ANALYSIS
Particulars	2019	2018	Difference	%
	$	$	$
Revenues
Sales (net)	230800	211000	19800	9.4
Other revenues	9100	6000	3100	51.7
Total revenues	239900	217000	22900	10.6
Less- Expenses
Cost of goods sold	118100	102000	16100	15.8
Selling, general & administrative expenses	54300	50000	4300	8.6
Interest expenses	7200	6400	800	12.5
Income tax expense	22700	21700	1000	4.6
Total expense	202300	180100	22200	12.3
Net income/(loss)	37600	36900	700	1.9