Problem

Analyzing Comparative Financial Statements Using PercentagesThe comparative financial stat...

Analyzing Comparative Financial Statements Using Percentages

The comparative financial statements prepared at December 31, 2012, for Prince Company showed the following summarized data:

 

2012

2011

Income Statement

Sales revenue

$190,000*

$167,000

Cost of goods sold

112,000

100,000

Gross profit

78,000

67,000

Operating expenses and interest expense

56,000

53,000

Pretax income

22,000

14,000

Income tax

8,000

4,000

Net income

$ 14,000

$ 10,000

Balance Sheet

Cash

$ 4,000

$ 7,000

Accounts receivable (net)

14,000

18,000

Inventory

40,000

34,000

Operational assets (net)

45,000

38,000

 

$103,000

$ 97,000

Current liabilities (no interest)

$ 16,000

$ 17,000

Long-term liabilities (10% interest)

45,000

45,000

Common stock (par $5)

30,000

30,000

Retained earnings

12,000

5,000

 

$103,000

S 97,000

*One third was credit sales.

*During 2012. cash dividends amounting to $3,000 were declined and paid.

Required:

1. Complete the following columns for each item in the preceding comparative financial statements:

INCREASE (DEC REASE)

2012 OVER 20II

Amount

Percent

2. By what amount did working capital change?

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