With the given statement of financial position, conduct a horizontal analysis. YEAR 1YEAR 2ASSETSCURRENT ASSETSCash1,669,5602,896,540Accounts Receivable740,000850,000Allowance for doubtful accounts-16,000-20,000Merchandise Inventory470,000610,000Supplies70,00093,000Prepaid Rent45,00010,000TOTAL CURRENT ASSETS2,978,5604,439,540NON-CURRENT ASSETSStore Equipment1,000,0001,200,000Accumulated Depreciation- Store Equipment-265,000-300,000TOTAL NON-CURRENTS ASSETS735,000900,000TOTAL ASSETS3,713,5605,339,540LIABILITIESCURRENT LIABILITIESAccounts Payable1,090,0001,000,000Salaries Payable36,00025,000Utilities Payable12,00010,500TOTAL CURRENT LIABILITIES1,138,0001,035,500NON-CURRENT LIABILITIESNotes Payable400,000356,000TOTAL NON-CURRENT LIABILITIES400,000356,000TOTAL LIABILITIES1,538,0001,391,500OWNER'S EQUITYHeels & Feels, Capital2,175,5603,948,040TOTAL LIABILITIES & OWNER'S EQUITY3,713,5605,339,540

Horizontal analysis is very important analysis of financial statements, which shows how much assets…

Answered: With the given statement of financial…

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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With the given statement of financial position, conduct a horizontal analysis.

YEAR 1
YEAR 2
ASSETS
CURRENT ASSETS
Cash
1,669,560
2,896,540
Accounts Receivable
740,000
850,000
Allowance for doubtful accounts
-16,000
-20,000
Merchandise Inventory
470,000
610,000
Supplies
70,000
93,000
Prepaid Rent
45,000
10,000
TOTAL CURRENT ASSETS
2,978,560
4,439,540
NON-CURRENT ASSETS
Store Equipment
1,000,000
1,200,000
Accumulated Depreciation- Store Equipment
-265,000
-300,000
TOTAL NON-CURRENTS ASSETS
735,000
900,000
TOTAL ASSETS
3,713,560
5,339,540
LIABILITIES
CURRENT LIABILITIES
Accounts Payable
1,090,000
1,000,000
Salaries Payable
36,000
25,000
Utilities Payable
12,000
10,500
TOTAL CURRENT LIABILITIES
1,138,000
1,035,500
NON-CURRENT LIABILITIES
Notes Payable
400,000
356,000
TOTAL NON-CURRENT LIABILITIES
400,000
356,000
TOTAL LIABILITIES
1,538,000
1,391,500
OWNER'S EQUITY
Heels & Feels, Capital
2,175,560
3,948,040
TOTAL LIABILITIES & OWNER'S EQUITY
3,713,560
5,339,540

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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