The comparative financial statements prepared at December 31 for Tiger Audio sho
ID: 2595607 • Letter: T
Question
The comparative financial statements prepared at December 31 for Tiger Audio showed the following summarized data:
Complete the two final columns shown beside each item in Tiger Audio’s comparative financial statements. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.)
The comparative financial statements prepared at December 31 for Tiger Audio showed the following summarized data:
Required 1. Complete the two final columns shown beside each item in Tiger Audio's comparative financial statements. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.) TIGER AUDIO Horizontal Analysis Increase (Decrease) in Current (versus Previous) Current Previous Amount Percentage Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net Total Assets Accounts Payable Income lax Payable Note Payable (long-term) Total Liabilities Common Stock (par $1) Retained Earnings Total Liabilities and Stockholders' EquityS 215,405 $ 194,060 $ 226,000 $ 188,000 112,800 75,200 33,930 3,450 37,820 11,346 $ 35,105 $ 26,474 131,650 94,350 40,000 4,200 50,150 15,045 $40,305 $ 33,660 16,200 22,200 122,000 $ 215,405 $ 194,060 $27,400 $25,300 2,960 91,800 120,060 26,000 48,000 18,800 25,300 131,000 3,200 75,700 106,300 26,000 83,105Explanation / Answer
1. TIGER AUDIO
HORIZONTAL ANALYSIS
2.a. Sales increased by the largest dollar amount of $78,000.
2.b. Retained earnings increased by the largest percentage of 73.1%
INCREASE (DECREASE) IN CURRENT (VERSUS PREVIOUS) CURRENT PREVIOUS AMOUNT PERCENTAGE INCOME STATEMENT Sales revenue $226,000 $188,000 78,000 41.4% Cost of goods sold 131,650 112,800 18,850 16.7% Gross profit 94,350 75,200 19,150 25.4% Operating Expenses 40,000 33,930 6,070 17.8% Interest Expense 4,200 3,450 750 21.7% Income before income tax expense 50,150 37,820 12,330 32.6% Income tax expense (30%) 15,045 11,346 3,699 32.6% Net Income 35,105 26,474 8,631 32.6% BALANCE SHEET Cash 40,305 33,660 6,645 19.7% Accounts Receivables, net 18,800 16,200 2,600 16.0% Inventory 25,300 22,200 3,100 13.9% Property and Equipment, Net 131,000 122,000 9,000 7.3% Total assets 215,405 194,060 21,345 10.9% Accounts payable 27,400 25,300 2,100 8.3% Income Tax payable 3,200 2,960 240 8.1% Note payable (long term) 75,700 91,800 (16,100) (17.5%) Total liabilities 106,300 120,060 (13,760) (11.4%) Common Stock (par $1) 26,000 26,000 NO CHANGE NO CHANGE Retained earnings 83,105 48,000 35,105 73.1% Total liabilities and stockholder's equity 215,405 194,060 21,345 10.9%