Question

In: Accounting

Please don't answer Using the following financial data construct a balance sheet and income statment. Expenses...

Please don't answer

Using the following financial data construct a balance sheet and income statment.

Expenses and Income are Monthly

Stocks Account

12,000

Salary 1

5,500

Automobile 1

30,000

Utilities

350

Automobile 1 Loan Balance

-18,000

Credit Card Balance

-9,000

Groceries

400

Contributions to Savings

300

Mortgage (P&I) Only

1,150

CD (14 month maturity)

3,000

Automobile 1 Payment

300

Savings Account

11,000

Mortgage Balance

-230,000

House Property Taxes

450

Salary 2

2,500

House

310,000

401(k) Employer Match

250

401(K) Savings Contribution

300

Monthly Income and FICA

1,100

Credit Card Payment

450

Homeowners Insurance

200

401(K) Balance

30,000

Solutions

Expert Solution

1. Category 2012 2013 %
Current assets 7000000 46.67% 9000000 60.00% Increase
Total fixed assets 8000000 53.33% 6000000 40.00% Decrease
Total assets 15000000 100.00% 15000000 100.00%
Current liabilities 3000000 20.00% 1000000 6.67% Decrease
Long term debt 4000000 26.67% 4000000 26.67% Same
Owner’s equity 8000000 53.33% 10000000 66.67% Increase
Total liabilities & owner’s equity 15000000 100.00% 15000000 100.00%
Current ratio will increase --liquidity position has improved
Equity participation is more ,whereas, debt funding % remains the same.
2. Salaries 42000
Interest Income 150
Dividend Income 190
Total Income 42340
Less: Expenses:
Mortgage payment 7980
Food 2400
Transportation 1200
Automobile payment 3060
Clothes & personal 2000
Student loan payment 1700
Propert taxes 1100
Utilities 3000
Insurance 2100
Income taxes 9700
Recreation & vacation 2000 36240
Family’s disposable income 6100
3. Statement of financial position
Assets Liabilities
Cash accounts: Student loan balance 6000
Cash 50 Automobile loan balance 12000
Checking account 2500 Credit card balance 4000
Savings account 5850 Mortgage loan balance 99000
Savings 5800 Net woth (Bal.fig.) 40800
Investments:
Stocks & bonds 2600
401(K) retirement a/c 15000
Assets for use:
Residence 110000
Automobile 12000
Furniture,clothing Jewelry 8000
161800 161800
4.     Income statement
Net sales 500000
Less: COGS 250000
Gross profit 250000
Less: Operating expenses:
Salaries 100000
Rent 24000
Utilities 25000
Payroll taxes 25000
Insurance 12000 186000
Operating Income 64000
Less: Non-operating expense
Interest expense 5450
Net profit 58550
5. Horizontal/trend analysis
2012     2013     Horizontal Analysis(2013-2012)/2012
Current assets 7000000 9000000 28.57% Increase
Total fixed assets 8000000 6000000 -25.00% Decrease
Total assets 15000000 15000000 0.00%
Current liabilities 3000000 1000000 -66.67% Decrease
Long-term debt 4000000 4000000 0.00% Same
Owner’s equity 8000000 10000000 25.00% Increase
Total liabilities & owner’s equity 15000000 15000000 0.00%
Leads to same conclusion as Vertical analysis

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