Bundle: Managerial Accounting, 14th + Cengagenowv2, 1 Term Printed Access Card
Bundle: Managerial Accounting, 14th + Cengagenowv2, 1 Term Printed Access Card
14th Edition
ISBN: 9781337499989
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 14, Problem 2PB
To determine

Vertical Analysis

Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount.

Formula:

Vertical analysis percentage =(Specific itemBaseamount)×100

This analysis is otherwise called as common-size statement.

To prepare: Comparative income statement for the two-year period.

Given info: Income statement for the two year period.

To determine

Requirement 2:

To comment: Significant relationships revealed by the horizontal analysis.

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Blockbuster Co is building a new state of the art cineplex at a cost of $3,500,000.They received a capital investment of $1,500,000. The remainder of funds will haveto be borrowed so they decided to issue bonds. They have issued 10.5%, 5-yearbonds. These bonds were issued on January 1st, 2020, and pay semi-annual intereston July 1st and January 1st. The bonds yield 10%. The year end is December 31st Calculate the proceeds from the sale of the bond. Clearly show theamount of the premium or discount and state two reasons which supportthe premium or discount calculated

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