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3. A common-size income statement for Palomer would report (amounts rounded) a. Net income of 19% b. Sales of 100% c. Cost of sales at 34% d. All of the above 4. A common-size balance sheet for Palomer would report (amounts rounded) a. Current liabilities as 28% of total assets b. Owner's capital is 53% of total liabilities and equity c. Receivables is 7% of total liabilities and equity d. All of the above 5. Trend analysis will show which of the following? a. 15% increase in Current Liabilities b. 33% increase in Owner's Capital c. 19% increase in Long Term Liabilities All of the above

3. A common-size income statement for Palomer would report (amounts rounded) a. Net income of 19% b. Sales of 100% c. Cost of sales at 34% d. All of the above 4. A common-size balance sheet for Palomer would report (amounts rounded) a. Current liabilities as 28% of total assets b. Owner's capital is 53% of total liabilities and equity c. Receivables is 7% of total liabilities and equity d. All of the above 5. Trend analysis will show which of the following? a. 15% increase in Current Liabilities b. 33% increase in Owner's Capital c. 19% increase in Long Term Liabilities All of the above

FINANCIAL ACCOUNTING
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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3. A common-size income statement for Palomer would report (amounts rounded) a. Net income of 19% b. Sales of 100% c. Cost of sales at 34% d. All of the above 4. A common-size balance sheet for Palomer would report (amounts rounded) a. Current liabilities as 28% of total assets b. Owner's capital is 53% of total liabilities and equity c. Receivables is 7% of total liabilities and equity d. All of the above 5. Trend analysis will show which of the following? a. 15% increase in Current Liabilities b. 33% increase in Owner's Capital c. 19% increase in Long Term Liabilities d. All of the above
Transcribed Image Text:3. A common-size income statement for Palomer would report (amounts rounded) a. Net income of 19% b. Sales of 100% c. Cost of sales at 34% d. All of the above 4. A common-size balance sheet for Palomer would report (amounts rounded) a. Current liabilities as 28% of total assets b. Owner's capital is 53% of total liabilities and equity c. Receivables is 7% of total liabilities and equity d. All of the above 5. Trend analysis will show which of the following? a. 15% increase in Current Liabilities b. 33% increase in Owner's Capital c. 19% increase in Long Term Liabilities d. All of the above
The financial statements of PalomerTrading Ltd. are given below: 2019 Cash and Cash Equivalents P 12,250 2018 P 10,470 Receivables 9,065 8,055 Inventory 6,620 5,300 Prepaid Expenses 8,545 10,600 Total Current Assets 36,480 34,425 Other Assets 92,500 P 128,980 P 113,110 78,685 Total Assets Total current liabilities 36,150 42,335 Long-term liabilities 23,990 18,960 Psalm Palomer, Capital 68,840 51,815 Total Liabilities and Equity P 128,980 P 113,110 2019 P 104,705 Net Sales Cost of Goods Sold 32,275 Gross Profit 69,430 Selling Expenses 35,325 Administrative Expenses 12,815 Operating Income 21,290 Interest Expense 1,050 Net Income P 20,240 Required: Prepare a horizontal and vertical analysis for Palomer Trading financial statements. Choose the correct answer in each of the following. 1. Horizontal analysis of 2019 Palomer's balance sheet would report a. Cash as 9.50% of total assets b. 19% decrease in Prepaid Expenses c. 19% increase in Cash d. All of the above 2. Vertical analysis of 2019 Palomer's balance sheet would report a. Cash as 9.50% of total assets b. 17% increase in Prepaid Expenses c. 19% increase in Cash d. All of the above
Transcribed Image Text:The financial statements of PalomerTrading Ltd. are given below: 2019 Cash and Cash Equivalents P 12,250 2018 P 10,470 Receivables 9,065 8,055 Inventory 6,620 5,300 Prepaid Expenses 8,545 10,600 Total Current Assets 36,480 34,425 Other Assets 92,500 P 128,980 P 113,110 78,685 Total Assets Total current liabilities 36,150 42,335 Long-term liabilities 23,990 18,960 Psalm Palomer, Capital 68,840 51,815 Total Liabilities and Equity P 128,980 P 113,110 2019 P 104,705 Net Sales Cost of Goods Sold 32,275 Gross Profit 69,430 Selling Expenses 35,325 Administrative Expenses 12,815 Operating Income 21,290 Interest Expense 1,050 Net Income P 20,240 Required: Prepare a horizontal and vertical analysis for Palomer Trading financial statements. Choose the correct answer in each of the following. 1. Horizontal analysis of 2019 Palomer's balance sheet would report a. Cash as 9.50% of total assets b. 19% decrease in Prepaid Expenses c. 19% increase in Cash d. All of the above 2. Vertical analysis of 2019 Palomer's balance sheet would report a. Cash as 9.50% of total assets b. 17% increase in Prepaid Expenses c. 19% increase in Cash d. All of the above
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