Question
In: Accounting
Prepare a horizontal analysis on the income statement and Balance statement. (Please show the formula &...
Prepare a horizontal analysis on the income statement and Balance statement. (Please
show the formula & your calculations
balance Sheet
December 31, 20X7 & 20X6
Assets 20X7 20X6
Cash $ 15,000 17,000
Marketable securities 10,000 10,000
Accounts receivable (net) 20,000 22,000
Inventory 30,000 27,000
Prepaid expenses 8,000 9,000
Property, plant, and equipment 117,000 117,000
Total assets $200,000 202,000
Liabilities and Stockholders' Equity
Current liabilities $ 30,000 27,000
Long-term liabilities 61,000 56,000
Stockholders' equity 109,000 119,000
Total liabilities and stockholders' equity $200,000 202,000
Westwood Corporation
Income Statement
For the Year Ended December 31, 20X7 & 20X6
Net sales $160,000 150,000
Cost of goods sold 120,000 118,000
Gross margin $ 40,000 32,000
Operating expenses
Selling and administrative expenses $ 16,000 23,000
Interest expense 8,000 7,750
Income taxes expense 4,000 28,000 250
Net income $ 12,000 1,000
Solutions
Expert Solution
| Westwood Corporation | ||||
| Horizontal Analysis of Balance Sheets | ||||
| 2017 | 2016 | Percentage Change | ||
| Assets | ||||
| Cash | $15,000.00 | $17,000.00 | -$2,000.00 | -11.76% |
| Marketable securities | $10,000.00 | $10,000.00 | $0.00 | 0.00% |
| Accounts receivable (net) | $20,000.00 | $22,000.00 | -$2,000.00 | -9.09% |
| Inventories | $30,000.00 | $27,000.00 | $3,000.00 | 11.11% |
| Prepaid Expense | $8,000.00 | $9,000.00 | -$1,000.00 | -11.11% |
| Property Plant & Equipment | $117,000.00 | $117,000.00 | $0.00 | 0.00% |
| Total assets | $200,000.00 | $202,000.00 | -$2,000.00 | -0.99% |
| Liabilities and Stockholders’ Equity | ||||
| Liabilities | ||||
| Current liabilities | $30,000.00 | $27,000.00 | $3,000.00 | 11.11% |
| Long Term Liabilities | $61,000.00 | $56,000.00 | $5,000.00 | 8.93% |
| Total liabilities | $91,000.00 | $83,000.00 | $8,000.00 | 9.64% |
| Stockholders' equity | $109,000.00 | $119,000.00 | -$10,000.00 | -8.40% |
| Total liabilities & stockholders’ equity | $200,000.00 | $202,000.00 | -$2,000.00 | -0.99% |
| Westwood Corporation | ||||
| Horizontal Analysis of Income Statements | ||||
| 2017 | 2016 | Percentage Change | ||
| Sales (net) | $160,000 | $150,000 | $10,000 | 6.67% |
| Less: Cost of goods sold | 120,000 | 118,000 | $2,000 | 1.69% |
| Gross Margin | 40,000 | 32,000 | $8,000 | 25.00% |
| Less: Selling, general, and administrative expenses | 16,000 | 23,000 | ($7,000) | -30.43% |
| Interest expense | 8,000 | 7,750 | $250 | 3.23% |
| Income tax expense | 4,000 | 250 | $3,750 | 1500.00% |
| Net income (loss) | $12,000 | $1,000 | $11,000 | 1100.00% |
Note : Answer may be slighlty difference due to Income tax Expense , there is 2 figuere mentioned for income tax expense in 2016, one is 28000 and second is 250 , i have considered income tax expense as $250 to solve the solution . if any this is different please replace the same , rest all the solution is correct.
ekkarill92 answered 1 year agoRelated Solutions
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