Financial Statement Analysis| Below is the information obtained from the financial statements of MAC TRADING COMPANY for the year ended December 31 of the current year. Balance Sheet Accounts (Dec. 31) 20-CY 20-PY Income Statement Accounts (Dec. 31) Sales 20-CY 150,000 850,000 5,250,000 250,000 Cash 283,000 Marketable Securities 1,000,000 Sales Returns and Allowances Accounts Receivable, net 1,000,000 500,000 500,000 Inventory, Dec. 31, 20-CY Inventory, Dec. 31, 20-PY Inventories 500,000 750,000 750,000 Land 500,000 500,000 Purchases 2,750,000 550,000 400,000 Building, net Machinery and Equipment, net 500,000 Selling Expenses 1,500,000 1,700,000 Administrative Expenses Goodwill 400,000 400,000 600,000 (including Depreciation of P250,000) Interest on Long-term Notes Other Assets 90,000 100,000 250,000 100,000 Notes Payable, Trade Accounts Payable, net Expenses Payable Long-term Notes 150,000 790,000 610,000 60,000 40,000 2,250,000 2,500,000 15% Preferred Stock, P100 par 500,000 500,000 Common Stock, P10 par 1,500,000 1,500,000 523,000 Retained Earnings 250,000 Additional Information: There are only 300 business days during the year. Income Taxes, 30% Required: 1. Prepare a comparative Balance Sheet for 20-PY and 20-CY and an Income Statement. 2. Perform a horizontal analysis for the comparative balance sheet showing the peso and percentage changes of each item. 3. Perform a vertical analysis showing the ratio of each item of the income statement to Sales and each item of the comparative balance sheet to Total Assets, Total Liabilities, and Stockholders' Equity.
Financial Statement Analysis| Below is the information obtained from the financial statements of MAC TRADING COMPANY for the year ended December 31 of the current year. Balance Sheet Accounts (Dec. 31) 20-CY 20-PY Income Statement Accounts (Dec. 31) Sales 20-CY 150,000 850,000 5,250,000 250,000 Cash 283,000 Marketable Securities 1,000,000 Sales Returns and Allowances Accounts Receivable, net 1,000,000 500,000 500,000 Inventory, Dec. 31, 20-CY Inventory, Dec. 31, 20-PY Inventories 500,000 750,000 750,000 Land 500,000 500,000 Purchases 2,750,000 550,000 400,000 Building, net Machinery and Equipment, net 500,000 Selling Expenses 1,500,000 1,700,000 Administrative Expenses Goodwill 400,000 400,000 600,000 (including Depreciation of P250,000) Interest on Long-term Notes Other Assets 90,000 100,000 250,000 100,000 Notes Payable, Trade Accounts Payable, net Expenses Payable Long-term Notes 150,000 790,000 610,000 60,000 40,000 2,250,000 2,500,000 15% Preferred Stock, P100 par 500,000 500,000 Common Stock, P10 par 1,500,000 1,500,000 523,000 Retained Earnings 250,000 Additional Information: There are only 300 business days during the year. Income Taxes, 30% Required: 1. Prepare a comparative Balance Sheet for 20-PY and 20-CY and an Income Statement. 2. Perform a horizontal analysis for the comparative balance sheet showing the peso and percentage changes of each item. 3. Perform a vertical analysis showing the ratio of each item of the income statement to Sales and each item of the comparative balance sheet to Total Assets, Total Liabilities, and Stockholders' Equity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Financial Statement Analysis |
Below is the information obtained from the financial statements of MAC TRADING COMPANY for the year ended December 31 of the current year.
Balance Sheet Accounts (Dec. 31)
20-CY
20-PY
Income Statement Accounts (Dec. 31)
20-CY
150,000
850,000
5,250,000
250,000
Cash
283,000
Sales
Marketable Securities
1,000,000
Sales Returns and Allowances
Accounts Receivable, net
1,000,000
500,000
Inventory, Dec. 31, 20-CY
500,000
Inventories
500,000
750,000
Inventory, Dec. 31, 20-PY
750,000
Land
500,000
500,000
Purchases
2,750,000
Building, net
500,000
550,000
Selling Expenses
400,000
Machinery and Equipment, net
1,500,000
1,700,000
Administrative Expenses
Goodwill
400,000
400,000
(including Depreciation of P250,000)
600,000
Other Assets
90,000
100,000
Interest on Long-term Notes
250,000
Notes Payable, Trade
150,000
100,000
610,000
Accounts Payable, net
Expenses Payable
Long-term Notes
790,000
60,000
40,000
2,250,000
2,500,000
15% Preferred Stock, P100 par
500,000
500,000
1,500,000
Common Stock, P10 par
Retained Earnings
1,500,000
523,000
250,000
Additional Information:
There are only 300 business days during the year.
Income Taxes, 30%
Required:
1. Prepare a comparative Balance Sheet for 20-PY and 20-CY and an Income Statement.
2. Perform a horizontal analysis for the comparative balance sheet showing the peso and percentage changes of each item.
3. Perform a vertical analysis showing the ratio of each item of the income statement to Sales and each item of the comparative balance sheet to
Total Assets, Total Liabilities, and Stockholders' Equity.
4. Perform a ratio analysis using the items from the comparative balance sheet and income statements to evaluate the firm's activity, liquidity,
solvency, and profitability for the current year.
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