Question

Exercise 12-4 Part 1 Required 1. Prepare a vertical analysis of the balance sheet data for 2019 and 2018. Express each amount as a percentage of total assets. FEDERER SPORTS APPAREL Balance Sheet December 31 2019 2018 Amount l % -1-Amount | % Assets Cash S 600,000 1,712,500 1,175,000 2,862,500 8,250,000 780,000 Accounts receivable inventory Buildings Less: Accumulated depreciation (1,500,000) 1.120,000 (750,000 10,000,000 Total assets Liabilities and Stockholders Equity Accounts payable Contingent liability 12,500,000 1,237.500 1,200,000 5,100,000 4,962,500 1,300,000 Common stock Retained earnings 5,100,000 Hints References eBook & Resources Hint#1 Check my work value: 0.06 points Exercise 12-4 Part 2 2. Prepare a horizontal analysis for 2019 using 2018 as the base year. (Decreases should be indicated by a minus sign. Round y FEDERER SPORTS APPAREL Balance Sheet December 31

Answer 1

Vertical and Horizontal analysis of the Balance sheet is as prepared below:

Federer Sports apparel
Balance Sheet
Dec-31
	2019		2018
	Amount	%	Amount	%
Assets
Cash	1,712,500	13.70%	600,000	6.00%
Account Receivable	1,175,000	9.40%	780,000	7.80%
Inventory	2,862,500	22.90%	1,120,000	11.20%
Building	8,250,000	66.00%	8,250,000	82.50%
less: Acc dep	-1,500,000	-12.00%	-750,000	-7.50%
Total Assets	12,500,000	100.00%	10,000,000	100.00%
Liabilities
Accounts Payable	1,237,500	9.90%	1,300,000	13.00%
Contingent liability	1,200,000	9.60%	-	0.00%
Common Stock	5,100,000	40.80%	5,100,000	51.00%
Retained Earnings	4,962,500	39.70%	3,600,000	36.00%
Total liabilities and stockholders equity	12,500,000	100.00%	10,000,000	100.00%

Federer Sports apparel
Balance Sheet
Dec-31
	Year		Increase (Decrease)
	2019	2018	Amount	%
Assets
Cash	1,712,500	600,000	1,112,500	185.42%
Account Receivable	1,175,000	780,000	395,000	50.64%
Inventory	2,862,500	1,120,000	1,742,500	155.58%
Building	8,250,000	8,250,000	-	0.00%
less: Acc dep	-1,500,000	-750,000	-750,000	100.00%
Total Assets	12,500,000	10,000,000	2,500,000	25.00%
Liabilities
Accounts Payable	1,237,500	1,300,000	-62,500	-4.81%
Contingent liability	1,200,000	-	1,200,000	0
Common Stock	5,100,000	5,100,000	-	0.00%
Retained Earnings	4,962,500	3,600,000	1,362,500	37.85%
Total liabilities and stockholders equity	12,500,000	10,000,000	2,500,000	25.00%