[The following information applies to the questions displayed below.] The balanc

Question

[The following information applies to the questions displayed below.]

The balance sheets for Fantasy Football for 2018 and 2017 are provided below.

Required:

1. Prepare a vertical analysis of Fantasy Football's 2018 and 2017 balance sheets. Express each amount as a percentage of total assets for that year. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.)

2. Prepare a horizontal analysis of Fantasy Football's 2018 balance sheet using 2017 as the base year. (Negative amounts and Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.)

FANTASY FOOTBALL Balance Sheets December 31 2018 2017 Amount % Amount % Assets Current assets: Cash $208,000 $262,200 Accounts receivable 856,000 999,400 Inventory 1,900,000 1,349,000 Supplies 124,000 87,400 Long-term assets: Equipment 1,292,000 1,292,000 Less: Accumulated depreciation (380,000) (190,000) Total assets $4,000,000 $3,800,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $168,000 $129,200 Interest payable 0 3,800 Income tax payable 76,000 76,000 Long-term liabilities: Notes payable 760,000 760,000 Stockholders' equity: Common stock 786,600 786,600 Retained earnings 2,209,400 2,044,400 Total liabilities and stockholders’ equity $4,000,000 $3,800,000

Explanation / Answer

Answer 1)

Answer 2)

FANTASY FOOTBALL Balance Sheets 31-Dec 2018 2017 Amount % Amount % Assets Current assets: Cash $208,000 5% $262,200 7% Accounts receivable 856,000 21% 999,400 26% Inventory 1,900,000 48% 1,349,000 36% Supplies 124,000 3% 87,400 2% Long-term assets: 0% Equipment 1,292,000 32% 1,292,000 34% Less: Accumulated depreciation -380,000 -10% -190,000 -5% Total assets $4,000,000 100% $3,800,000 100% Liabilities and Stockholders' Equity Current liabilities: Accounts payable $168,000 4% $129,200 3% Interest payable 0 0% 3,800 0% Income tax payable 76,000 2% 76,000 2% Long-term liabilities: 0% 0% Notes payable 760,000 19% 760,000 20% Stockholders' equity: Common stock 786,600 20% 786,600 21% Retained earnings 2,209,400 55% 2,044,400 54% Total liabilities and stockholders’ equity $4,000,000 100% $3,800,000 100%

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