Question

SPORTS UNLIMITED Balance Sheets December 31 2017 2018 Amount % Amount Assets Current assets: 104,400 $ $ 176,400 Cash 37,200 72,800 Accounts receivable 112,800 81,200 Inventory 12,600 25,200 Prepaid rent Long-term assets: 81,200 Investment in bonds 208,200 165,900 Land 157,200 158,200 Equipment (60,900) (32,400) Less: Accumulated depreciation $ 700,000 600,000 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 66,500 79,200 16,800 Interest payable 8,400 10,500 Income tax payable 6,000 Long-term liabilities: Notes payable 211,400 169,800 Stockholders' equity: 210,000 210,000 Common stock Retained earnings 184,800 126,600 Total liabilities and stockholders' equity $ 700,000 600,000

1. prepare a vertical analysis of Sports Unlimited'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 answer to 1 decimal place.)

2. Prepare a horizontal analysis of Sports Unlimited'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.)

Answer 1

2017 Amount % SPORTS UNLIMITED Balance Sheet December 31 2018 Amount % Assets Current assets : Cash $176,400 Accounts receivable $ 72.800 Inventory $ 81,200 Prepaid Rent $ 25,200 Long-term assets : Investment in Bonds $ 81,200 Land $165,900 Equipment $158.200 Less: Accumulated depreciation $ (60.900) Total Assets $ 700.000 Liabilities and Stockholders' Equity 25.2% 10.49 11.6% 3.6% $ $ $ S 104,400 37,200 112.800 12,600 17.4% 6.2% 18.8% 2.1% 11.6% 23.7% 22.6% -8.79 100.0% S S 208,200 $ 157,200 $ (32.400 $ 600.000 0.0% 34.7% 26.2% -5.4% 100.0%

S 66,500 $ 16,800 $ 10,500 9.5% 2.4% 1.5% S $ S 79,200 8,400 6,000 13.2% 1.4% 1.0% Current Liabilities: Accounts Payable Interest payable Income Tax payable Loang-term liabilities : Notes Payable Stockholders' equity : Common stock Retained earnings Total liabilities and Stockholders' equity $211,400 30.2% S 169,800 28.3% $210,000 $184.800 $700.000 30.0% 26.4% 100.0% S 210.000 $ 126,600 $ 600.000 35.0% 21.1% 100.0%

SPORTS UNLIMITED Balance Sheet December 31 Year Increase (Decrease) 2018 2017 Amount % Assets Current assets : Cash $176,400 $104,400S 72.000 69.0% Accounts receivable S 72.800 $ 37,200 $ 35,600 95.7% Inventory $ 81,200 $112.800 S (31.600) -28.0% Prepaid Rent $ 25,200 $ 12.600S 12.600 100.0% Long-term assets : Investment in Bonds $ 81,200 $ IS 81.200 Land $165,900 $208,200 $ (42,300) -20.3% Equipment $ 158,200 $157,200 $ 1.000 0.6% Less: Accumulated depreciation $ (60.900) S (32.400) S (28.500 88.0% Total Assets $ 700,000 $600,000 S 100,000 16.7% Liabilities and Stockholders' Equity

$ 66,500 $ 16.800 $ 10,500 $ 79,200 S S 8.400 S $ 6,000 $ (12,700 8.400 4,500 -16.0% 100.0% 75.0% Current Liabilities: Accounts Payable Interest payable Income Tax payable Loang-term liabilities : Notes Payable Stockholders' equity : Common stock Retained earnings |Total liabilities and Stockholders' equity $211,400 $169.800 S 41,600 24.5% $210,000 $210,000 S $184,800 $126,600S 58,200 $700,000 $600,000 S 100.000 0.0% 46.0% 16.79