Question :
EXERCISES
140.The liabilities and stockholders’ equity sections of comparative balance sheets : 1302947
EXERCISES
140.The liabilities and stockholders’ equity sections of comparative balance sheets for Jenson International are presented below for 2014 and 2013:
December 31
20142013
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 67,500 $ 85,451
Other current liabilities 3,488 5,157
Total current liabilities70,988 90,608
Long term debt 333,777 436,215
Total liabilities404,765 526,823
Stockholders’ equity:
Common stock100,000 100,000
Additional paid in capital275,000 275,000
Retained earnings 350,171 78,583
Total stockholders’ equity 725,171 453,583
Total liabilities and stockholders’ equity $1,129,936 $980,406
Prepare a horizontal analysis of the liabilities and stockholders’ equity sections of Jenson International’s balance sheets.
141.Comparative income statements for Jenson International are shown below for 2014 and 2013:
Year Ended December 31
20142013
Net sales$2,451,000 $2,321,000
Cost of goods sold1,650,455 1,348,330
Gross margin800,545 972,670
Operating expenses 385,000 420,408
Operating income415,545 552,262
Interest expense 45,600 33,181
Income before taxes369,945 519,081
Income taxes expense 98,357 135,600
Net income$ 271,588 $ 383,481
Prepare a vertical analysis of the company’s income statements.
142.The following information for Redwood Junction, a retail furniture and design firm, is presented for 2014 and 2013:
December 31
20142013
Assets
Current assets
Cash$ 42,000 $ 54,000
Accounts receivable580,000445,000
Inventory5,010,000 4,950,000
Prepaid expenses 84,000 79,000
Total current assets5,716,000 5,528,000
Building and equipment, net 1,097,000 1,095,000
Total assets$6,813,000 $6,623,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 605,000 $ 628,000
Bank loan payable679,000625,000
Other accrued payables 215,000 315,000
Total current liabilities1,499,000 1,568,000
Long-term debt 1,729,000 1,791,000
Total liabilities3,228,000 3,359,000
Stockholders’ equity:
Common stock1,307,000 1,307,000
Retained earnings 2,278,000 1,957,000
Total stockholders’ equity 3,585,000 3,264,000
Total liabilities and stockholders’ equity $6,813,000 $6,623,000
Perform a horizontal analysis of the assets section of the balance sheets for Redwood Junction. Identify the largest change.
143.The following information for Woodchuck, a retail furniture and design firm, is presented for the years ending December 31, 2014 and 2013:
Year Ended December 31
20142013
Net sales$5,628,000$5,253,000
Cost of goods sold 2,900,000 2,700,000
Gross margin2,728,000 2,553,000
Operating expenses:
Selling expenses500,000600,000
General and administrative expenses 835,000 788,000
Total operating expenses 1,335,000 1,388,000
Operating income1,393,000 1,165,000
Interest expense 139,000 158,000
Income before taxes1,254,000 1,007,000
Income taxes 439,000 368,000
Net income$ 815,000$ 639,000
Perform a horizontal analysis of the income statements for Woodchuck. Identify the largest change and list some of the causes that may have led to this change.
costs.
144.The following information for Redwood Junction, a retail furniture and design firm, is presented for 2014 and 2013:
December 31
Assets2014 2013
Current assets
Cash$ 42,000 $ 54,000
Accounts receivable580,000445,000
Inventory5,010,000 4,950,000
Prepaid expenses 84,000 79,000
Total current assets5,716,000 5,528,000
Building and equipment, net 1,097,000 1,095,000
Total assets$6,813,000 $6,623,000
Perform a vertical analysis of the asset section of the balance sheets for the company. Identify any major changes between 2013 and 2014. Indicate what could have led to the changes you noted in this analysis.
