Pinnacle Plus declared and paid a cash dividend of $6,500 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information:
Required:
1. Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements.
2-a. Which account increased by the largest dollar amount?
2-b. Which account increased by the largest percentage?
1. Income Statement
Current year | Previous year | Amount | Percentage | |
Sales revenue | 121,000 | 106,700 | 14,300 | 13.4% |
Cost of goods sold | 54,200 | 49,100 | 5,100 | 10.4% |
Gross Profit | 66,800 | 57,600 | 9,200 | 15.9% |
Operating expenses | 35,500 | 32,600 | 2,900 | 8.9% |
Interest expense | 3,900 | 3,900 | Nil | Nil |
Income before income tax expense | 27,400 | 21,100 | 6,300 | 29.8% |
Income tax expense (30%) | 8,220 | 6,330 | 1,890 | 29.8% |
Net Income | 19,180 | 14,770 | 4,410 | 29.8% |
Balance Sheet
Current year | Previous year | Amount | Percentage | |
Cash | 76,570 | 39,900 | 36,670 | 91.9% |
Accounts receivable | 17,200 | 10,200 | 7,000 | 68.6% |
Inventory | 24,900 | 37,800 | -12,900 | -34.1% |
Property and equipment | 94,900 | 104,500 | -9,600 | -9.2% |
Total assets | 213,570 | 192,400 | 21,170 | 11% |
Accounts payable | 44,200 | 36,100 | 8,100 | 22.4% |
Income tax payable | 1,290 | 900 | 390 | 43.3% |
Note payable | 39,000 | 39,000 | Nil | Nil |
Total liabilities | 84,490 | 76,000 | 8,490 | 11.2% |
Common stock | 89,000 | 89,000 | Nil | Nil |
Retained earnings | 40,080 | 27,400 | 12,680 | 46.3% |
Total liabilities and stockholders' equity | 213,570 | 192,400 | 21,170 | 11% |
Amount Increase / Decrease = Current year - Previous year
% Increase / Decrease = Amount Increase / Decrease / Previous year
2. Cash account is increased by lagrest dollar amount i.e $36,670.
3. Cash account is increased by lagrest percentage i.e 91.9%.
for formulas and calculations, refer to the image below -
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