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The balance sheets for Fantasy Football for 2018 and 2017 are provided below.
Required:
1. Prepare a vertical analysis of Fantasy Football's 2018 and 2017 balance sheets. Express each amount as a percentage of total assets for that year. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.)
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2. Prepare a horizontal analysis of Fantasy
Football's 2018 balance sheet using 2017 as the base year.
(Negative amounts and Decreases should be indicated by a
minus sign. Round your percentage answers to 1
decimal place.)
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(1) vertical analysis of Fantasy Football's 2018 and 2017 balance sheets
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FANTASY FOOTBALL |
||||
|
Balance Sheets |
||||
|
December 31 |
||||
|
2018 |
2017 |
|||
|
Amount |
% |
Amount |
% |
|
|
Assets |
||||
|
Current assets: |
||||
|
Cash |
208,000.00 |
5.2 % |
262,200.00 |
6.9 % |
|
Accounts receivable |
856,000.00 |
21.4 % |
999,400.00 |
26.3 % |
|
Inventory |
1,900,000.00 |
47.5 % |
1,349,000.00 |
35.5 % |
|
Supplies |
124,000.00 |
3.1 % |
87,400.00 |
2.3 % |
|
Long-term assets: |
- |
- |
||
|
Equipment |
1,292,000.00 |
32.3 % |
1,292,000.00 |
34% |
|
Less: Accumulated depreciation |
(380,000.00) |
(9.5%) |
(190,000.00) |
(5.0%) |
|
Total assets |
4,000,000.00 |
100 |
3,800,000.00 |
100% |
|
Liabilities and Stockholders' Equity |
- |
- |
||
|
Current liabilities: |
- |
- |
||
|
Accounts payable |
168,000.00 |
4.2 % |
129,200.00 |
3.4 % |
|
Interest payable |
- |
- |
3,800.00 |
0.1 % |
|
Income tax payable |
76,000.00 |
1.9 % |
76,000.00 |
2 % |
|
Long-term liabilities: |
- |
- |
||
|
Notes payable |
760,000.00 |
19% |
760,000.00 |
20% |
|
Stockholders' equity: |
- |
- |
||
|
Common stock |
786,600.00 |
19.7% |
786,600.00 |
20.7% |
|
Retained earnings |
2,209,400.00 |
55.2 % |
2,044,400.00 |
53.8 % |
|
Total liabilities and stockholders’ equity |
4,000,000.00 |
100% |
3,800,000.00 |
100% |
(2) Horizontal analysis of Fantasy Football's 2018 balance sheet using 2017 as the base year
|
FANTASY FOOTBALL |
||||
|
Balance Sheets |
||||
|
December 31 |
||||
|
Year |
Increase or (Decrease) |
|||
|
2018 |
2017 |
Amount |
% |
|
|
Assets |
||||
|
Current assets: |
||||
|
Cash |
208,000.00 |
262,200.00 |
(54,200.00) |
(20.7%) |
|
Accounts receivable |
856,000.00 |
999,400.00 |
(143,400.00) |
(14.3%) |
|
Inventory |
1,900,000.00 |
1,349,000.00 |
551,000.00 |
40.8% |
|
Supplies |
124,000.00 |
87,400.00 |
36,600.00 |
41.9% |
|
Long-term assets: |
||||
|
Equipment |
1,292,000.00 |
1,292,000.00 |
- |
- |
|
Less: Accumulated depreciation |
(380,000.00) |
(190,000.00) |
(190,000.00) |
100% |
|
Total assets |
4,000,000.00 |
3,800,000.00 |
200,000.00 |
5.3% |
|
Liabilities and Stockholders' Equity |
||||
|
Current liabilities: |
||||
|
Accounts payable |
168,000.00 |
129,200.00 |
38,800.00 |
30% |
|
Interest payable |
- |
3,800.00 |
(3,800.00) |
(100%) |
|
Income tax payable |
76,000.00 |
76,000.00 |
- |
- |
|
Long-term liabilities: |
||||
|
Notes payable |
760,000.00 |
760,000.00 |
- |
- |
|
Stockholders' equity: |
||||
|
Common stock |
786,600.00 |
786,600.00 |
- |
- |
|
Retained earnings |
2,209,400.00 |
2,044,400.00 |
165,000.00 |
8.1% |
|
Total liabilities and stockholders’ equity |
4,000,000.00 |
3,800,000.00 |
200,000.00 |
5.3%a |
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