Exercise 12-4B Prepare vertical and horizontal analyses (LO12-1, 12-2)[The following information applies to the questions displayed below.]The balance sheets for Company A for Year 2 and Year 1 are presented below.Exercise 12-4B Part 1Required:1. Prepare a vertical analysis of the balance sheet data for Year 2 and Year 1. Express each amount as a percentage of totalassets. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.)COMPANY ABalance SheetDecember 31Year 2Year 1AmountAmountAssetsCash$ 2,310,000$840,000Accounts receivable1,305,0001,044,000Inventory4,005,0002,136,000Buildings8,580,0008,580,000Less: Accumulated depreciation(1,200,000)(600,000)Total assets$ 15,000,000$ 12,000,000Liabilities and Stockholders' EquityAccounts payable$1,725,000$ 1,380,000Contingent liability1,230,000Common stock4,920,0004,920,000Retained earnings7,125,0005,700,000Total liabilities and stockholders' equity$ 15,000,000$ 12,000,000 Reyuii eu immoITTiativiIExercise 12-4B Prepare vertical and horizontal analyses (LO12-1, 12-2)[The following information applies to the questions displayed below.]The balance sheets for Company A for Year 2 and Year 1 are presented below.Exercise 12-4B Part 22. Prepare a horizontal analysis for Year 2 using Year 1 as the base year. (Note: If the percentage increase or decrease cannot becalculated, then leave the cell blank. Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimalplace.)COMPANY ABalance SheetDecember 31YearIncrease (Decrease)Year 2Year 1Amount%AssetsCash$ 2,310,000 $840,000Accounts receivable1,305,0001,044,000Inventory4,005,0002,136,000Buildings8,580,0008,580,000Less: Accumulated depreciation(1,200,000)(600,000)Total assets$ 15,000,000$ 12,000,000Liabilities and Stockholders' EquityAccounts payable$1,725,000 $ 1,380,000Contingent liability1,230,000Common stock4,920,0004,920,000Retained earnings7,125,0005,700,000Total liabilities and stockholders' equity$ 15,000,000 $ 12,000,000

Balance Sheet is a statement of an entity which is generally prepared on yearly basis. It shows…

Required: 1. Prepare a vertical analysis of the balance sheet data for Year 2 and Year 1. Express each amount as a percentage of total assets. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.) COMPANY A Balance Sheet December 31 Year 2 Year 1 Amount Amount % Assets Cash $ 2,310,000 2$ 840,000 Accounts receivable 1,305,000 1,044,000 Inventory 4,005,000 2,136,000 Buildings 8,580,000 8,580,000 Less: Accumulated depreciation (1,200,000) (600,000) Total assets $ 15,000,000 $ 12,000,000 Liabilities and Stockholders' Equity Accounts payable $ 1,725,000 $ 1,380,000 Contingent liability 1,230,000 Common stock 4,920,000 4,920,000 Retained earnings 7,125,000 5,700,000 Total liabilities and stockholders' equity $ 15,000,000 $ 12,000,000

Required: 1. Prepare a vertical analysis of the balance sheet data for Year 2 and Year 1. Express each amount as a percentage of total assets. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.) COMPANY A Balance Sheet December 31 Year 2 Year 1 Amount Amount % Assets Cash $ 2,310,000 2$ 840,000 Accounts receivable 1,305,000 1,044,000 Inventory 4,005,000 2,136,000 Buildings 8,580,000 8,580,000 Less: Accumulated depreciation (1,200,000) (600,000) Total assets $ 15,000,000 $ 12,000,000 Liabilities and Stockholders' Equity Accounts payable $ 1,725,000 $ 1,380,000 Contingent liability 1,230,000 Common stock 4,920,000 4,920,000 Retained earnings 7,125,000 5,700,000 Total liabilities and stockholders' equity $ 15,000,000 $ 12,000,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.17MCE

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