Question

Required information 2 Problem 12-3A Perform vertical and horizontal analysis (LO12-1, 12-2) The following information applies to the questions displayed below. The balance sheets for Sports Unlimited for 2021 and 2020 are provided below. Problem 12-3A Part 2 ok 2. Prepare a horizontal analysis of Sports Unlimited's 2021 balance sheet using 2020 as the base year. (Negative amounts an Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.) SPORTS UNLIMITED nces Balance Sheets For the years ended December 31 Increase (Decrease) Year 2021 2020 Amount % Assets Current assets 103,500 S 70,400 32,000 Cash 46,800 Accounts receivable 71,200 44,550 Inventory 7,200 3,600 Prepaid rent Long-term assets 54,900 0 Investment in bonds 117.450 141,600 Land 102,000 106.200 Equipment (30,600) (20,800) Less: Accumulated depreciation

Answer 1

Answer -

SPORTS UNLIMITED
Balance Sheets
For the years ended December 31
	Year		Increase (Decrease)
	2021	2020	Amount	%
Assets
Current assets:
Cash	$103500	$70400	$33100	47.0%
Accounts receivable	$46800	$32000	$14800	46.3%
Inventory	$44550	$71200	($26650)	(37.4%)
Prepaid rent	$7200	$3600	$3600	100%
Long-term assets:
Investment in bonds	$54900	$0	$54900	0%
Land	$117450	$141600	($24150)	(17.1%)
Equipment	$106200	$102000	$4200	4.1%
Less: Accumulated depreciation	($30600)	($20800)	($9800)	(47.1%)
Total assets	$450000	$400000	$50000	12.5%
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable	$30150	$46800	($16650)	(35.6%)
Interest payable	$7200	$3600	$3600	100%
Income tax payable	$12150	$10000	$2150	21.5%
Long-term liabilities:
Notes payable	$138150	$127600	$10550	8.3%
Stockholders equity:
Common stock	$144000	$144000	$0	0%
Retained earnings	$118350	$68000	$50350	74.0%
Total liabilities and stockholders equity	$450000	$400000	$50000	12.5%

Calculation:

Cash:

= $103500 - $70400 = $33100 (Increase)

= ($33100 / $70400) * 100

= 47.0%

Accounts receivable:

= $46800 - $32000 = $14800 (Increase)

= ($14800 / $32000) * 100

= 46.3%

Inventory:

= $44550 - $71200 = ($26650) (Decrease)

= [($26650) / $71200] * 100

= (37.4%)

Prepaid rent:

= $7200 - $3600 = $3600 (Increase)

= ($3600 / $3600) * 100

=100%

Investment in bonds:

= $54900 - $0 = $54900 (Increase)

Land:

= $117450 - $141600 = ($24150) (Decrease)

= [($24150) / $141600] * 100

= (17.1%)

Equipment:

= $106200 - $102000 = $4200 (Increase)

= ($4200 / $102000) * 100

= 4.1%

Accumulated depreciation:

= ($30600) - ($20800) = ($9800) (Decrease)

= [($9800) / ($20800)] * 100

= (47.1%)

Total assets:

= $450000 - $400000 = $50000 (Increase)

= ($50000 / $400000) * 100

= 12.5%

Accounts payable:

= $30150 - $46800 = ($16550) (Decrease)

= [($16550) / $46800] * 100

= (35.6%)

Interest payable:

= $7200 - $3600 = $3600 (Increase)

= ($3600 / $3600) * 100

= 100%

Income tax payable:

= $12150 - $10000 = $2150 (Increase)

= ($2150 / $10000) * 100

= 21.5%

Notes payable:

= $138150 - $127600 = $10550 (Increase)

= ($10550 / $127600) * 100

= 8.3%

Common stock:

= $144000 - $144000 = $0

Retained earnings:

= $118350 - $68000 = $50350 (Increase)

= ($50350 / $68000) * 100

= 74.0%

Total liabilities and stockholders’ equity:

= $450000 - $400000 = $50000 (Increase)

= ($50000 / $400000) * 100

= 12.5%