Jenny's Art Shop, Inc., sells vintage books. The firm's comparative income statement and balance sheet for the years 2015 and 2016 follow:

INSTRUCTIONS
1. Prepare both a horizontal and a vertical analysis of the two statements. Carry all calculations to two decimal places, and then round to one place. (Leave all vertical analysis percentages unadjusted in this problem.)
2. Make written comments about any of the results that seem worthy of investigation.
Analyze:
If Jenny's Art Shop experiences the same growth in net sales in 2017 as was reported in 2016, what net sales can be projected?

Transcribed Image Text:

Jenny's Art Shop, Inc Com Income Statement For Years Ended December 31, 2016 and 2015 Amounts 2016 2015 Revenue Sales Less Sales Returns and Allowances 276500 25 50 0 Net Sales Cost of Goods Sold Merchandise Inven 1500 5 500o 2000 0 Total Merchandise Available for Sale 12 00 0 0 5000 200 o 150000 12 50 0 0 Cost of Goods Sold Gross erating Expenses Expenses Sales Salaries E 600 0 0 50 00 0 5000 ll Tax Expense Other Selling Expenses 68000 57 5o0 General and Administrative ses 4000 0 Tax 4500 5000 400 500 0 Depreciation Expense Other General and Administrative Total General and Administrative 0oo 0 Total 7 500 1 300 11 50 Income Tax Expense Net Income After Income Taxes 1105 9 775 Jenny's Art Shop, Inc Comparative Balance Shee December 31, 2016 and 2015 Amounts 2016 2015 Assets Current Assets Cash Accounts Receivable Merchandise Invent Prepaid Expenses Supplies 281 30 270oo 20000 65 0 3 9 5 76175 3 0515 2 500 0 5000 5 00 2 50 71 2 6 5 Total Current Assets Plant, and Equipment Land Building and Store Equipment Less Accumulated Depreciation-Bldg & Store E Net Book Value-Building and Store Equipment 3 5 00 0 5 000 0 5000 3 500 0 3 500 0 500 0 0 Total Property, Plant, and Equipment Total Assets 4 0 00 0 75000 14626 5 146 17 5 Liabilities and Stockholders' Current Liabilities Accounts Payable Sales Tax Payable Payroll Taxes Interest Taxes Pavable 8 500 75 00 1215 9 10 Payable 35 0 Total Current Liabilities 102 25 104 2o Long-Term Liabilities Mortgage Payable Total Long-Term Liabilities Total Liabilities 79 2 2 5 80420 Stockholders' Equit Common Stock ($1 par, 20,000 shares authorized 20,000 shares issued and outstandin Paid-in Capital-Common Stock Retained Earnin 2 000 500 644 50 2 000 500 6 313 4 5 6 584 5 14 62 65 Total Stockholders' Equit Total Liabilities and Stockholders' E 14617 5