1. Prepare Vertical Analysis for both the income statement and the balance sheet.2. Examine the company's Assets, Liabilities and Stockholder's Equity. P 2303: FINANCIAL ANALYSIS AND REPORTINGSY 2021-2022(FINAL OUTPUT)ABC INDUSTRIESCONSOLIDATED INCOME STATEMENTDECEMBER 31, 202020202019AmountPercentAmountPercentNet SalesP 38,028,500P 26,315,42016,526,0849,789,336Cost of Goods Sold26,358,500Gross ProfitP 11,670,000Selling Expenses7,111,740General and Administrative Expenses 2,123,4209,235,1602,434,840925,239P 1,509,6016,157,8081,368,4027,526,2102,263,126868,4091,394,717Total Operating ExpensesEarnings before income taxIncome taxNet IncomeCommon Stock sharesOutstandingEarnings per shareOf common stock2,500,0002,498,7500.600.56 CONSOLIDATED BALANCE SHEETAS OF DECEMBER 31, 202020212019ASSETSAmountPercentAmountPercenCURRENT ASSETSCash and Cash equivalentsP 1,271,231P 677,600Account Receivable (Net)994,409773,134Note Receivable350,0003,250,000320,0004,190,000Merchandise InventoriesTotal Current Assets5,865,6405,960,734Property and Equipment(Net) 13,668,85011,798,155TOTAL ASSETSP 19,534,490P 17,758,889LIABILITIESAccounts PayableSalaries PayableIncome Taxes PayableOther accrued expenses1,275,3001,477,800330,000245,200500,20048,339925,2398,000Total Current LiabilitiesP 2,538,5392,271,539Long-Term LiabilitiesMortgage PayableBonds Payable500,000536,0002,340,0002,400,000Total Long-term Liabilities2,900,0002,876,000TOTAL LIABILITIES5,438,5395,147,539STOCKHOLDERS' EQUITYCommon Stock, 2,500,000 sharesat P1 par value per share2,500,0002,498,750Capital in excess of par value1,750,0001,726,250Retained EarningsJanuary 1, 20 XX8,386,3506,991,633Net Income for the Year1,509,6011,424,717Less dividends50,00030,000RetainedEarnings, Dec 31 20XX9,845,9518,386,350TOTAL STOCKHOLDER'S EQUITY 14,095,95112,611,350TOTAL LIABILITIES ANDSTOCKHOLDER'S EQUITYP 19,534,490P 17,758,889

Vertical Analysis: Under this method, each line item is listed in the financial statement as a…

Answered: P 2303: FINANCIAL ANALYSIS AND…

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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1. Prepare Vertical Analysis for both the income statement and the balance sheet.

2. Examine the company's Assets, Liabilities and Stockholder's Equity.

P 2303: FINANCIAL ANALYSIS AND REPORTING
SY 2021-2022
(FINAL OUTPUT)
ABC INDUSTRIES
CONSOLIDATED INCOME STATEMENT
DECEMBER 31, 2020
2020
2019
Amount
Percent
Amount
Percent
Net Sales
P 38,028,500
P 26,315,420
16,526,084
9,789,336
Cost of Goods Sold
26,358,500
Gross Profit
P 11,670,000
Selling Expenses
7,111,740
General and Administrative Expenses 2,123,420
9,235,160
2,434,840
925,239
P 1,509,601
6,157,808
1,368,402
7,526,210
2,263,126
868,409
1,394,717
Total Operating Expenses
Earnings before income tax
Income tax
Net Income
Common Stock shares
Outstanding
Earnings per share
Of common stock
2,500,000
2,498,750
0.60
0.56

CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2020
2021
2019
ASSETS
Amount
Percent
Amount
Percen
CURRENT ASSETS
Cash and Cash equivalents
P 1,271,231
P 677,600
Account Receivable (Net)
994,409
773,134
Note Receivable
350,000
3,250,000
320,000
4,190,000
Merchandise Inventories
Total Current Assets
5,865,640
5,960,734
Property and Equipment(Net) 13,668,850
11,798,155
TOTAL ASSETS
P 19,534,490
P 17,758,889
LIABILITIES
Accounts Payable
Salaries Payable
Income Taxes Payable
Other accrued expenses
1,275,300
1,477,800
330,000
245,200
500,200
48,339
925,239
8,000
Total Current Liabilities
P 2,538,539
2,271,539
Long-Term Liabilities
Mortgage Payable
Bonds Payable
500,000
536,000
2,340,000
2,400,000
Total Long-term Liabilities
2,900,000
2,876,000
TOTAL LIABILITIES
5,438,539
5,147,539
STOCKHOLDERS' EQUITY
Common Stock, 2,500,000 shares
at P1 par value per share
2,500,000
2,498,750
Capital in excess of par value
1,750,000
1,726,250
Retained Earnings
January 1, 20 XX
8,386,350
6,991,633
Net Income for the Year
1,509,601
1,424,717
Less dividends
50,000
30,000
Retained
Earnings, Dec 31 20XX
9,845,951
8,386,350
TOTAL STOCKHOLDER'S EQUITY 14,095,951
12,611,350
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY
P 19,534,490
P 17,758,889

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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