Question

Happy Days, Inc.

Comparative Balance Sheet

June 30, 2019 and 2018

Assets			Increase (Decrease)
	2019	2018	Amount	Percent
Current assets	$266,000	$190,000
Property, plant, and equipment	428,000	405,000
Intangible assets	24,000	31,000
Total Assets	$718,000		$92,000	14.7%
Liabilities
Current liabilities	$81,000	$85,000
Long-term liabilities	240,000	278,000
Total Liabilities	$321,000		$(42,000)	(11.6%)
Stockholders’ Equity
Common stock	$276,000	$210,000
Retained earnings	121,000	53,000
Total Stockholders’ Equity	$397,000		$134,000	51.0%
Total Liabilities & Stockholders’ Equity	$718,000		$92,000	14.7%

1. Prepare a comparative balance sheet (horizontal analysis) for June 30, 2019 and 2018. (Round percentages to one decimal place.)

2. Interpret your findings: Focus on two accounts you find most interesting and explain why. What may have caused the accounts to change?

3. Vertical Analysis: In 2019 -- Current Assets are what % of Total Assets?   _____________

Answer 1

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Happy Days, Inc.
Balance Sheet			Horizontal Analysis
	USD	USD	Increase or (Decrease) 2019 over 2018
Assets	2019	2018	Dollars	Percent	Answer a
Total Current Assets	266,000.00	190,000.00	76,000.00	40.0%	I find changes in Current Assets interesting. It may be because the company did lot of cash transactions or was unable to cover from accounts receivable in time.
Property, plant, and equipment	428,000.00	405,000.00	23,000.00	5.7%
Intangible assets	24,000.00	31,000.00	(7,000.00)	-22.6%
Total Assets	718,000.00	626,000.00	92,000.00	14.7%
Liabilities
Total Current Liabilities	81,000.00	85,000.00	(4,000.00)	-4.7%
Long-term liabilities	240,000.00	278,000.00	(38,000.00)	-13.7%
Total Liabilities	321,000.00	363,000.00	(42,000.00)	-11.6%
Stockholder's Equity
Common Stock	276,000.00	210,000.00	66,000.00	31.4%
Retained Earnings	121,000.00	53,000.00	68,000.00	128.3%	I find changes in Retained Earnings interesting. It may be because the company made lot of sales or tried to reduce its expenses.
Total Stockholder's Equity	397,000.00	263,000.00	134,000.00	51.0%
Total Liabilities and Equity	718,000.00	626,000.00	92,000.00	14.7%
Vertical Analysis
Assets	2019
Total Current Assets	266,000.00
Total Assets	718,000.00
Current Assets %	37.0%
In 2019 Current Assets are 37% of Total Assets.