Requirements:a. Prepare horizontal analysis based on the above statements presented (for percent: round of your answers to 2 decimal places) Music Lover, Inc.xlsxb. Evaluate the company's financial position and results of operation using the comparative statement analysisi. Short-term solvency analysisii. Long-term financial position analysis iii. Operating efficiency and profitability analysis Music Lover, Inc.Comparative Statement of Financial PositionDecember 31, 2019 and 2018Increase(Decrease)Percent20192018AmountAssetsCurrent AssetsCashAccounts receivable (net)InventoryPrepaid expensesTotal current assets68,25070,392218,549 184,978223,242 197,09767,71076,542579,893 526,867Noncurrent AssetsPlant, Property and Equipment (net)Total Assets90,503110,987670,396 637,854Liabilities and Equity|Current LiabilitiesAccounts payableBank loans and other payablesCurrent portion of notes payableTotal current liabilities158,214139,13571,67256,76930,00030,000259,886 225,904Long-term liabilitiesNotes payable (11%)Total liabilitiesEquityPreference shares, P8 dividend, Pi00 parOrdinary shares, P1 par valueAdditional paid-in capitalTotal paid-in capitalRetained earningsTotal equity139,000 169,000398,886 394,90470,00070,00010,00010,00090,00090,000170,000 170,000101,51072,950271,510 242,950670,396 637,854Total liabilities and equityMusic Lover, Inc.Comparative Income StatementFor the Years Ended December 31, 2019 and 2018Increase(Decrease)AmountPercent20192018Sales revenue2,000,0001,801,802ExpensesCost of goods soldSellingAdministrativeTotal expensesOperating incomeInterest expenseIncome before taxesIncome taxes (35%)Net income1,472,000248,000138,0001,858,000142,0001,309,910230,000142,0001,681,910119,89229,27090,6223171858,90427,907114,0933993374,160Dividends to preference shareholdersNet income remaining for ordinary shareholdersDividends to ordinary shareholdersNet income added to retained earningsRetained earnings, beg. of yearRetained earnings, end of year5,60068,5605,60053,30432,00040,00028,56072,950101,51021,30451,64672,950

Horizontal analysis of financial statements: In horizontal analysis of financial statement, the…

Requirements: a. Prepare horizontal analysis based on the above statements presented (for percent: round of your answers to 2 decimal places) Music Lover, Inc.xlsx b. Evaluate the company's financial position and results of operation using the comparative statement analysis i. Short-term solvency analysis ii. Long-term financial position analysis iii. Operating efficiency and profitability analysis

Requirements: a. Prepare horizontal analysis based on the above statements presented (for percent: round of your answers to 2 decimal places) Music Lover, Inc.xlsx b. Evaluate the company's financial position and results of operation using the comparative statement analysis i. Short-term solvency analysis ii. Long-term financial position analysis iii. Operating efficiency and profitability analysis

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 98.3C

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