Pinnacle Plus declared and paid a cash dividend of $7,000 in the current year. Its comparative financial statements, prepared atDecember 31, reported the following summarized information:Required:1. Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements.2-a. Which account increased by the largest dollar amount?2-b. Which account increased by the largest percentage?Complete this question by entering your answers in the tabs below.Reg 1Income StatementSales RevenueCost of Goods SoldGross ProfitReq 2AComplete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements. (Decreasesshould be indicated by a minus sign. Round percentage values to 1 decimal place.)Operating ExpensesInterest ExpenseIncome before Income Tax ExpenseIncome Tax Expense (30%)Net IncomeBalance SheetCashAccounts Receivable, NetInventoryProperty and Equipment, NetTotal AssetsReq 2BAccounts PayableIncome Tax PayableNotes Payable (long-term)Total LiabilitiesCommon Stock (par $10)Retained EarningsTotal Liabilities and Stockholders' EquityPINNACLE PLUSHorizontal AnalysisCurrent Year Previous Year$ 114,000 $ 101,80052,80048,40061,20053,40038,00034,0004,4004,40018,80015,0005,6404,50013,160 $10,500$$$$$66,060 $17,80025,40095,400204,660 $42,800 $1,80044,00088,60082,00034,060204,660 $< Req 133,20011,20038,800107,000190,20035,40090044,00080,30082,00027,900190,200Increase (Decrease)in the Current year (versusPrevious year)PercentageAmountReq 2A >%%%%%%%%%%%%%%%%%%%

MEANING OF COMPARATIVE HORIZONTAL ANALYSIS OF FINANCIAL STATEMENT In this two period financial statements are analyzed as increase or decrease in current year from previous year and percentage of increase or decrease is computed thereon. Formula for computation of percentage [(Current year amount-Previous year amount)÷ previous year]*1001. PINNACLE PLUS Horizontal Analysis Current Year Previous Year Increase(Decrease) in the current year(versus Previous year) Amount Percentage Income Statement Sales Revenue $114,000 $101,800 $12,200 12 % Cost of goods sold 52,800 48,400 4,400 9.1 % Gross profit 61,200 53,400 7,800 14.6 % Operating expense 38,000 34,000 4,000 11.8 % Interest expense 4,400 4,400 0 0 % Income before income tax expense 18,800 15,000 3,800 25.3 % Income Tax expense(30%) 5,640 4,500 1,140 25.3 % Net income $13,160 $10,500 $2,660 25.3 % Balance Sheet Cash $66,060 $33,200 $32,860 99 % Accounts Receivable,Net 17,800 11,200 6,600 58.92 % Inventory 25,400 38,800 -13,400 -52.8 % Property and equipment, Net 95,400 107,000 -11,600 -10.8 % Total Assets $204,660 $190,200 % Accounts Payable $42,800 $35,400 $7,400 20.9 % Income Tax Payable 1,800 900 900 100 % Notes Payable(long-term) 44,000 44,000 0 0 % Total liabilities 88,600 80,300 8,300 10.3 % Common Stock 82,000 82,000 0 0 % Retained Earnings 34,060 27,900 6160 22.1 % Total Liabilities and Stockshareholder’s Equity $204,660 $190,200 14,460 7.6 % 2-a The account increased by largest dollar amount is Cash as there is increase of $32,8602-b The account increased by largest percentage is Income tax payable as there is increase in 100%

Business

Accounting

1. Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements. 2-a. Which account increased by the largest dollar amount? 2-b. Which account increased by the largest percentage?

1. Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements. 2-a. Which account increased by the largest dollar amount? 2-b. Which account increased by the largest percentage?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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