Question
In: Accounting
5. Horizontal Analysis 12/31/17 12/31/16 Dollar Change Percentage Change Sales $9,550,000 $6,582,000 Net Income $775,000 $620,000...
5.
|
Horizontal Analysis |
12/31/17 |
12/31/16 |
Dollar Change |
Percentage Change |
|
Sales |
$9,550,000 |
$6,582,000 |
||
|
Net Income |
$775,000 |
$620,000 |
Complete the variance and percentage change for items above. (Round % to one decimal place)
b. Interpret your findings:
Accy 306 Quiz #5, page 2 of 2
6.
Happy Days, Inc.
Comparative Balance Sheet
December 31, 2017 and 2016
|
Assets |
Increase (Decrease) |
|||
|
2017 |
2016 |
Amount |
Percent |
|
|
Current assets |
225,000 |
$180,000 |
||
|
Property, plant, and equipment |
450,000 |
410,000 |
||
|
Intangible assets |
20,700 |
30,000 |
||
|
Total Assets |
75,700 |
12.2% |
||
|
Liabilities |
||||
|
Current liabilities |
75,000 |
80,000 |
||
|
Long-term liabilities |
220,000 |
260,000 |
||
|
Total Liabilities |
(47,000) |
(13.8%) |
||
|
Stockholders’ Equity |
||||
|
Common stock |
275,000 |
210,000 |
||
|
Retained earnings |
125,700 |
70,000 |
||
|
Total Stockholders’ Equity |
120,700 |
43.1% |
||
|
Total Liabilities & Stockholders’ Equity |
75,700 |
12.2% |
||
Prepare a comparative balance sheet (horizontal analysis) for December 31, 2017 and 2016. (Round percentages to one decimal place.)
Interpret your findings: Focus on two accounts you find most interesting and explain why. What may have caused the accounts to change?
Vertical Analysis: In 2017: Current Assets are what % of Total Assets? _____________
Solutions
Expert Solution
| Ans.5(a) | Horizontal Analysis | 13/31/17 | 12/31/16 | Dollar Change | Percentage Change | ||
| Sales | $ 9,550,000 | $ 6,582,000 | $ 2,968,000 | 45.1% | |||
| Net Income | $ 775,000 | $ 620,000 | $ 155,000 | 25% | |||
| Ans.5(b) | Interpretation: | ||||||
| i) | Change in Sales (dollar) = $9,550,000 - $6,582,000 | ||||||
| = | $ 2,968,000 | ||||||
| ii) | Change in Net Income (dollar) = | $775,000 - $6,20,000 | |||||
| = | $ 155,000 | ||||||
| iii) | Percentage change in: | ||||||
| Sales = | Change in sale / Previous year sale | ||||||
| = | $2,968,000 / $6,582,000 | ||||||
| = | 45.1% | ||||||
| iv) | Net Income= | Change in sale / Previous year sale | |||||
| = | $155,000 / $620,000 | ||||||
| = | 25% | ||||||
| Ans.6 | Happy Days, Inc. | ||||||
| Comparative Balance Sheet | |||||||
| December 31, 2017 and 2016 | |||||||
| Assets | Increase/(Decrease) | ||||||
| 2017 | 2016 | Amount | Percent | ||||
| Current Asset | 225,000 | 180,000 | 45,000 | 25.0% | |||
| Property,plant and Equipment | 450,000 | 410,000 | 40,000 | 9.8% | |||
| Intangible Asset | 20,700 | 30,000 | (9,300) | -31.0% | |||
| Total Asset | 695,700 | 620,000 | 75,700 | 12.2% | |||
| Liabilities: | |||||||
| Current Liabilities | 75,000 | 80,000 | (5,000) | -6.3% | |||
| Long Term Liabilities | 220,000 | 260,000 | (40,000) | -15.4% | |||
| Total Liabilities | 295,000 | 340,000 | (45,000) | -13.2% | |||
| Stockholders' Equity | |||||||
| Common Stock | 275,000 | 210,000 | 65,000 | 31.0% | |||
| Retained Earnings | 125,700 | 70,000 | 55,700 | 79.6% | |||
| Total Stockholderss' Equity | 400,700 | 280,000 | 120,700 | 43.1% | |||
| Total Liabilities & Stockholders' Equity | 695,700 | 620,000 | 75,700 | 12.2% | |||
| # | Vertical Analysis: In 2017: Current Assets % of Total Assets is: | ||||||
| = | $225,000 / $695700 | ||||||
| = | 32.3% | ||||||
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