2. Prepare a horizontal analysis for 2019 using 2018 as the base year. (Decrease

Question

2. Prepare a horizontal analysis for 2019 using 2018 as the base year. (Decreases or negative should be indicated by a minus sign. Round your percentage answers to 1 decimal place.) FEDERER SPORTS APPAREL Balance Sheet December 31 Year Increase (Decrease) 2019 2018 Amount Assets Cash Accounts receivable Inventory Buildings Less: Accumulated depreciation $ 2,370,000 S 937,500 1,012,500 2,000,000 9,225,000 (675,000) $ 15,000,000 S 12,500,000 1,215,000 3,540,000 9,225,000 (1,350,000) Total assets Liabilities and Stockholders' Equity Accounts payable Contingent liability Common stock Retained earnings $1,725,000 $ 1,500,000 230,000 6,000,000 4,770,000 $15,000,000 S 12,500,000 630,000 6,000,000 6,645,000 Total liabilities and stockholders' equity

Explanation / Answer

FEDERER SPORTS APPAREL Balance Sheet December 31 Year Increase (Decrease) 2019 2018 Amount % Assets Cash $2,370,000 $937,500 $1,432,500 152.80% Account Receivable 1,215,000 1,012,500 202,500 20.00% Inventory 3,540,000 2,000,000 1,540,000 77.00% Buildings 9,225,000 9,225,000 - - Less: Accumulated depreciation (1,350,000) (675,000) (675,000) 100.00% Total assets $15,000,000 $12,500,000 2,500,000 20.00% Liabilities and Stockholder's Equity Accounts Payable $1,725,000 $1,500,000 225,000 15.00% Contingent Liability 630,000 230,000 400,000 173.91% Common Stock 6,000,000 6,000,000 - - Retained Earnings 6,645,000 4,770,000 1,875,000 39.31% Total Liabilities and Stockholder's Equity $15,000,000 $12,500,000 2,500,000 20.00%

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