1. Consider the following financial information about Sam's Cake Factory for Dec. 31, 1999. The company assets are cash, $3,350; notes receivable, $1,546; accounts receivable, $4,675; merchandise inventory, $2,345; land, $90,125; equipment, $15,560. The liabilities are accounts payable, $18,575; wages payable, $25,432; notes payable, $26,821. The owner's cap- ital is $46,773. We also have the following financial information for Dec. 31, 1998: The company assets are cash, $2,200; notes receiv- able, $1,490; accounts receivable, $4,496; merchandise inventory, $2,857; land, $85,945; equipment, $17,651. The liabili- ties are accounts payable, $16,532; wages payable, $22,351; notes payable, $24,956. The owner's capital is $50,700. (a) Create a balance sheet for each of the above. (b) Perform a vertical analysis on each balance sheet. (c) Perform a comparative analysis of the two balance sheets. (d) Perform a horizontal analysis using the two balance sheets.

1. Consider the following financial information about Sam's Cake Factory for Dec. 31, 1999. The company assets are cash, $3,350; notes receivable, $1,546; accounts receivable, $4,675; merchandise inventory, $2,345; land, $90,125; equipment, $15,560. The liabilities are accounts payable, $18,575; wages payable, $25,432; notes payable, $26,821. The owner's cap- ital is $46,773. We also have the following financial information for Dec. 31, 1998: The company assets are cash, $2,200; notes receiv- able, $1,490; accounts receivable, $4,496; merchandise inventory, $2,857; land, $85,945; equipment, $17,651. The liabili- ties are accounts payable, $16,532; wages payable, $22,351; notes payable, $24,956. The owner's capital is $50,700. (a) Create a balance sheet for each of the above. (b) Perform a vertical analysis on each balance sheet. (c) Perform a comparative analysis of the two balance sheets. (d) Perform a horizontal analysis using the two balance sheets.

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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