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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.

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 5PB: Multiple-step income statement and balance sheet The following selected accounts and their current...
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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.
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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