BMSH2003
Name: DATE: SCORE:
HORIZONTAL AND VERTICAL ANALYSIS
Balance Sheet Accounts (Dec. 31) 201B 201A
Cash 290,000 150,000
Marketable Securities 1,000,000 850,000
Accounts Receivable, net 1,000,000 500,000
Inventories 500,000 750,000
Prepaid expenses 90,000 100,000
Land 700,000 500,000
Building, net 500,000 550,000
Machinery and Equipment, net 1,500,000 1,700,000
Notes Payable, Trade 150,000 100,000
Accounts Payable, net 635,000 610,000
Expenses Payable 20,000 40,000
Long-term Notes 2,250,000 2,500,000
Owner's Capital 2,000,000 2,000,000
Income Statement Accounts (Dec. 31) 201B
Sales 5,250,000
Sales Returns and Allowances 250,000
Inventory, Dec. 31, 201B 500,000
Inventory, Dec. 31, 201A 750,000
Purchases 2,750,000
Selling Expenses 400,000
Administrative Expenses (including Depreciation of
P250,000) 600,000
Interest expense 250,000
Additional Information:
Income tax rate is 30%.
Net Income is to be added to the Owner's Capital of the current year to arrive at the
adjusted balance of the capital for 201B.
Required: (70 points)
1. Prepare an income statement for the year ended December 31, 201B. (10 points)
2. Prepare a comparative statement of financial position for 201B and 201A. (10 points)
3. Prepare a vertical analysis of the income statement for the year ended December 31, 201B. (12 items
x 1 point)
4. Prepare a horizontal analysis showing the peso changes and percentage changes for 201B as
compared with 201A. (38 items x 1 point)
Rubric for scoring:
Performance Indicators Points
Correct accounts and amounts used 6
Computed final amounts are correct/balanced 4
Total 10
05 Quiz 1 *Property of STI
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