Attached are the Balance Sheet and Income Statement for Wholesale Distributors f
ID: 2371179 • Letter: A
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Attached are the Balance Sheet and Income Statement for Wholesale Distributors for the years 20X7 & 20X8. Additional Information. Capital Stock Issued and Outstanding 10,000 shares. This company is offering an additional 5,000 shares of stock at $25 per share Required: Perform a Vertical and Horizontal analysis on this companyDec 31, 07 Dec 31, 08 ASSETS Current Assets Checking/Savings Company Checking Account 36,857.66 84,444.87 Company Savings Account 25,000.00 25,000.00 Petty Cash Account 500.00 500.00 Total Checking/Savings 62,357.66 109,944.87 Accounts Receivable Accounts Receivable 40,202.50 56,835.69 Total Accounts Receivable 40,202.50 56,835.69 Other Current Assets Inventory Asset 51,060.47 127,651.18 Prepaids Prepaid Insurance 0.00 0.00 Prepaid Taxes 800.00 800.00 Total Prepaids 800.00 800.00 Security Deposits 1,200.00 1,200.00 Total Other Current Assets 53,060.47 129,651.18 Total Current Assets 155,620.63 296,431.74 Fixed Assets Accumulated Depreciation (923.04) (1,833.52) Automobiles & Trucks 45,632.00 45,632.00 Computer & Office Equipment 19,453.00 19,453.00 Machinery & Equipment 25,963.00 25,963.00 Total Fixed Assets 90,124.96 89,214.48 TOTAL ASSETS 245,745.59 385,646.22 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable 3,990.80 5,986.20 Total Accounts Payable 3,990.80 5,986.20 Credit Cards QuickBooks Credit Card 1,249.12 1,300.00 Total Credit Cards 1,249.12 1,300.00 Other Current Liabilities Line of Credit 104,618.08 136,003.50
Payroll Liabilities Payroll Taxes Payable 1,565.31 1,612.27 SEC125 Payable 100.00 100.00 Total Payroll Liabilities 1,665.31 1,712.27 Total Other Current Liabilities 106,283.39 137,715.77 Total Current Liabilities 111,523.31 145,001.97 Total Liabilities 111,523.31 145,001.97 Equity Common Stock 10,000.00 10,000.00 Additional Paid in Capital 33,949.80 33,949.80 Retained Earnings 0.00 90,272.48 Net Income 90,272.48 106,421.96 Total Equity 134,222.28 240,644.24 TOTAL LIABILITIES & EQUITY 245,745.59 385,646.21 0.00 (0.00)
Jan - Dec 07 Jan - Dec 08 Ordinary Income/Expense Income Revenue 372,951.45 410,246.60 Total Income 372,951.45 410,246.60 Cost of Goods Sold Direct Labor Wages - Warehouse 18,630.00 19,188.90 Total Direct Labor 18,630.00 19,188.90 Freight Costs 1,810.00 1,918.60 Packaging Materials 1,752.50 1,875.18 Purchases (Cost of Goods) 161,945.83 171,662.58 Sales Commission (outside reps) 3,990.80 8,204.93 Total COGS 188,129.13 202,850.19 Gross Profit 184,822.32 207,396.41 Expense Advertising Expense 2,000.00 2,600.00 Business License & Fees 710.23 710.23 Car/Truck Expense Car Lease 6,756.00 6,756.00 Gas 907.64 1,361.46 Insurance-Auto 1,440.00 1,440.00 Registration & License 546.00 546.00 Repairs & Maintenance 1,700.23 2,500.00 Total Car/Truck Expense 11,349.87 12,603.46 Conferences and Seminars 4,700.00 5,000.00 Contributions 2,500.00 2,000.00 Depreciation Expense 923.04 910.48 Dues and Subscriptions 1,900.00 1,900.00 Insurance General Liability Insurance 2,760.00 2,760.00 Owner's Health Insurance 4,272.00 4,336.08 Professional Liability Insuranc 6,875.00 6,875.00 Worker's Compensation 2,782.08 2,782.08 Total Insurance 16,689.08 16,753.16 Maintenance/Janitorial 2,841.95 3,000.00 Marketing Expense 4,982.00 5,500.00 Meals 1,376.35 2,000.00 Office Equipment 1,100.00 1,500.00 Postage and Delivery 1,098.00 1,300.00 Professional Fees Accounting Fees 2,544.00 3,000.00 Legal Fees 600.00 500.00 Payroll Service Fees 1,529.24 2,000.00 Total Professional Fees 4,673.24 5,500.00 Promotional Expense 2,021.00 2,000.00 Rent 7,005.00 7,005.00 Repairs Computer Repairs 390.00 500.00 Total Repairs 390.00 500.00 Supplies 6,199.36 7,000.00 Telephone 4,003.44 4,500.00 Travel & Entertainment Travel 3,452.23 4,000.00 Total Travel & Entertainment 3,452.23 4,000.00 Utilities 501.59 Wages Employee Benefits 2,253.96 2,321.58 Payroll Tax Expenses 3,751.05 3,863.58 Sick/Holiday & Vacation Pay 0.00 0.00 Wages - Office Staff 5,832.00 6,006.96 Total Wages 11,837.01 12,192.12 Total Expense 92,253.39 98,474.45 Net Ordinary Income 92,568.93 108,921.96 Other Income/Expense Other Expense Other Expense Interest Expense 2,296.45 2,500.00 Total Other Expense 2,296.45 2,500.00 Total Other Expense 2,296.45 2,500.00 Net Other Income -2,296.45 -2,500.00 Net Income 90,272.48 106,421.96
Attached are the Balance Sheet and Income Statement for Wholesale Distributors for the years 20X7 & 20X8. Additional Information. Capital Stock Issued and Outstanding 10,000 shares. This company is offering an additional 5,000 shares of stock at $25 per share Required: Perform a Vertical and Horizontal analysis on this company
Dec 31, 07 Dec 31, 08 ASSETS Current Assets Checking/Savings Company Checking Account 36,857.66 84,444.87 Company Savings Account 25,000.00 25,000.00 Petty Cash Account 500.00 500.00 Total Checking/Savings 62,357.66 109,944.87 Accounts Receivable Accounts Receivable 40,202.50 56,835.69 Total Accounts Receivable 40,202.50 56,835.69 Other Current Assets Inventory Asset 51,060.47 127,651.18 Prepaids Prepaid Insurance 0.00 0.00 Prepaid Taxes 800.00 800.00 Total Prepaids 800.00 800.00 Security Deposits 1,200.00 1,200.00 Total Other Current Assets 53,060.47 129,651.18 Total Current Assets 155,620.63 296,431.74 Fixed Assets Accumulated Depreciation (923.04) (1,833.52) Automobiles & Trucks 45,632.00 45,632.00 Computer & Office Equipment 19,453.00 19,453.00 Machinery & Equipment 25,963.00 25,963.00 Total Fixed Assets 90,124.96 89,214.48 TOTAL ASSETS 245,745.59 385,646.22 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable 3,990.80 5,986.20 Total Accounts Payable 3,990.80 5,986.20 Credit Cards QuickBooks Credit Card 1,249.12 1,300.00 Total Credit Cards 1,249.12 1,300.00 Other Current Liabilities Line of Credit 104,618.08 136,003.50
Payroll Liabilities Payroll Taxes Payable 1,565.31 1,612.27 SEC125 Payable 100.00 100.00 Total Payroll Liabilities 1,665.31 1,712.27 Total Other Current Liabilities 106,283.39 137,715.77 Total Current Liabilities 111,523.31 145,001.97 Total Liabilities 111,523.31 145,001.97 Equity Common Stock 10,000.00 10,000.00 Additional Paid in Capital 33,949.80 33,949.80 Retained Earnings 0.00 90,272.48 Net Income 90,272.48 106,421.96 Total Equity 134,222.28 240,644.24 TOTAL LIABILITIES & EQUITY 245,745.59 385,646.21 0.00 (0.00)
Jan - Dec 07 Jan - Dec 08 Ordinary Income/Expense Income Revenue 372,951.45 410,246.60 Total Income 372,951.45 410,246.60 Cost of Goods Sold Direct Labor Wages - Warehouse 18,630.00 19,188.90 Total Direct Labor 18,630.00 19,188.90 Freight Costs 1,810.00 1,918.60 Packaging Materials 1,752.50 1,875.18 Purchases (Cost of Goods) 161,945.83 171,662.58 Sales Commission (outside reps) 3,990.80 8,204.93 Total COGS 188,129.13 202,850.19 Gross Profit 184,822.32 207,396.41 Expense Advertising Expense 2,000.00 2,600.00 Business License & Fees 710.23 710.23 Car/Truck Expense Car Lease 6,756.00 6,756.00 Gas 907.64 1,361.46 Insurance-Auto 1,440.00 1,440.00 Registration & License 546.00 546.00 Repairs & Maintenance 1,700.23 2,500.00 Total Car/Truck Expense 11,349.87 12,603.46 Conferences and Seminars 4,700.00 5,000.00 Contributions 2,500.00 2,000.00 Depreciation Expense 923.04 910.48 Dues and Subscriptions 1,900.00 1,900.00 Insurance General Liability Insurance 2,760.00 2,760.00 Owner's Health Insurance 4,272.00 4,336.08 Professional Liability Insuranc 6,875.00 6,875.00 Worker's Compensation 2,782.08 2,782.08 Total Insurance 16,689.08 16,753.16 Maintenance/Janitorial 2,841.95 3,000.00 Marketing Expense 4,982.00 5,500.00 Meals 1,376.35 2,000.00 Office Equipment 1,100.00 1,500.00 Postage and Delivery 1,098.00 1,300.00 Professional Fees Accounting Fees 2,544.00 3,000.00 Legal Fees 600.00 500.00 Payroll Service Fees 1,529.24 2,000.00 Total Professional Fees 4,673.24 5,500.00 Promotional Expense 2,021.00 2,000.00 Rent 7,005.00 7,005.00 Repairs Computer Repairs 390.00 500.00 Total Repairs 390.00 500.00 Supplies 6,199.36 7,000.00 Telephone 4,003.44 4,500.00 Travel & Entertainment Travel 3,452.23 4,000.00 Total Travel & Entertainment 3,452.23 4,000.00 Utilities 501.59 Wages Employee Benefits 2,253.96 2,321.58 Payroll Tax Expenses 3,751.05 3,863.58 Sick/Holiday & Vacation Pay 0.00 0.00 Wages - Office Staff 5,832.00 6,006.96 Total Wages 11,837.01 12,192.12 Total Expense 92,253.39 98,474.45 Net Ordinary Income 92,568.93 108,921.96 Other Income/Expense Other Expense Other Expense Interest Expense 2,296.45 2,500.00 Total Other Expense 2,296.45 2,500.00 Total Other Expense 2,296.45 2,500.00 Net Other Income -2,296.45 -2,500.00 Net Income 90,272.48 106,421.96
Explanation / Answer
The two simplest ways to analyze your financial statements are vertically and horizontally. A vertical analysis shows you the relationships among components of one financial statement, measured as percentages. On your balance sheet, each asset is shown as a percentage of total assets; each liability or equity item is shown as a percentage of total liabilities and equity. On your statement of profit and loss, each line item is shown as a percentage of net sales. A horizontal analysis provides you with a way to compare your numbers from one period to the next, using financial statements from at least two distinct periods. Each line item has an entry in a current period column and a prior period column. Those two entries are compared to show both the dollar difference and percentage change between the two periods. refer to below link http://www.netplaces.com/accounting/the-best-use-of-your-financial-statements/vertical-and-horizontal-analysis.htm http://www.accountingformanagement.org/horizontal-analysis-of-financial-statements/
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