Question

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The balance sheets for Fantasy Football for 2018 and 2017 are provided below.

Required:

1. Prepare a vertical analysis of Fantasy Football's 2018 and 2017 balance sheets. Express each amount as a percentage of total assets for that year. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.)

FANTASY FOOTBALL Balance Sheets December 31 2018 2017 Amount % Amount % Assets Current assets: Cash $208,000 $262,200 Accounts receivable 856,000 999,400 Inventory 1,900,000 1,349,000 Supplies 124,000 87,400 Long-term assets: Equipment 1,292,000 1,292,000 Less: Accumulated depreciation (380,000) (190,000) Total assets $4,000,000 $3,800,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $168,000 $129,200 Interest payable 0 3,800 Income tax payable 76,000 76,000 Long-term liabilities: Notes payable 760,000 760,000 Stockholders' equity: Common stock 786,600 786,600 Retained earnings 2,209,400 2,044,400 Total liabilities and stockholders’ equity $4,000,000 $3,800,000

2. Prepare a horizontal analysis of Fantasy Football's 2018 balance sheet using 2017 as the base year. (Negative amounts and Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.)

FANTASY FOOTBALL Balance Sheets December 31 Year Increase (Decrease) 2018 2017 Amount % Assets Current assets: Cash $208,000 $262,200 Accounts receivable 856,000 999,400 Inventory 1,900,000 1,349,000 Supplies 124,000 87,400 Long-term assets: Equipment 1,292,000 1,292,000 Less: Accumulated depreciation (380,000) (190,000) Total assets $4,000,000 $3,800,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $168,000 $129,200 Interest payable 0 3,800 Income tax payable 76,000 76,000 Long-term liabilities: Notes payable 760,000 760,000 Stockholders' equity: Common stock 786,600 786,600 Retained earnings 2,209,400 2,044,400 Total liabilities and stockholders’ equity $4,000,000 $3,800,000

Answer 1

FANTASY FOOTBALL
Balance Sheets
Dec-31
	2018		2017
	Amount	%	Amount	%
Assets
Current assets:
Cash	$208,000	5.2%	$262,200	6.9%
Accounts receivable	$856,000	21.4%	$999,400	26.3%
Inventory	$1,900,000	47.5%	$1,349,000	35.5%
Supplies	$124,000	3.1%	$87,400	2.3%
Long-term assets:
Equipment	$1,292,000	32.3%	$1,292,000	34.0%
Less: Accumulated depreciation	($380,000)	-9.5%	($190,000)	-5.0%
Total assets	$4,000,000	100.0%	$3,800,000	100.0%
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$168,000	4.2%	$129,200	3.4%
Interest payable	$0	0.0%	$3,800	0.1%
Income tax payable	$76,000	1.9%	$76,000	2.0%
Long-term liabilities:		0.0%		0.0%
Notes payable	$760,000	19.0%	$760,000	20.0%
Stockholders' equity:
Common stock	$786,600	19.7%	$786,600	20.7%
Retained earnings	$2,209,400	55.2%	$2,044,400	53.8%
Total liabilities and stockholders’ equity	$4,000,000	100.0%	$3,800,000	100.0%

FANTASY FOOTBALL
Balance Sheets
Dec-31
	Year		Increase (Decrease)
	2018	2017	Amount	%
Assets
Current assets:
Cash	$208,000	$262,200	($54,200)	-20.7%
Accounts receivable	$856,000	$999,400	($143,400)	-14.3%
Inventory	$1,900,000	$1,349,000	$551,000	40.8%
Supplies	$124,000	$87,400	$36,600	41.9%
Long-term assets:
Equipment	$1,292,000	$1,292,000	$0	0.0%
Less: Accumulated depreciation	($380,000)	($190,000)	$190,000	-100.0%
Total assets	$4,000,000	$3,800,000	$200,000	5.3%
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$168,000	$129,200	$38,800	30.0%
Interest payable	$0	$3,800	($3,800)	-100.0%
Income tax payable	$76,000	$76,000	$0	0.0%
Long-term liabilities:
Notes payable	$760,000	$760,000	$0	0.0%
Stockholders' equity:
Common stock	$786,600	$786,600	$0	0.0%
Retained earnings	$2,209,400	$2,044,400	$165,000	8.1%
Total liabilities and stockholders’ equity	$4,000,000	$3,800,000	$200,000	5.3%