The balance sheets for Federer Sports Apparel for 2022 and 2021 are presented below.

Required:

1. Prepare a vertical analysis of the balance sheet data for 2022 and 2021. Express each amount as a percentage of total assets.

2. Prepare a horizontal analysis for 2022 using 2021 as the base year.

Transcribed Image Text:

FEDERER SPORTS APPAREL Balance Sheets DECEMBER 31 2022 2021 Assets Cash $ 2,300,000 $ 800,000 Accounts receivable 1,500,000 1,200,000 Inventory 2,800,000 1,700,000 Buildings Less: Accumulated depreciation 11,000,000 11,000,000 (2,000,000) $15,600,000 (1,000,000) $13,700,000 Total assets Liabilities and Stockholders' Equity Accounts payable Contingent liability $ 1,450,000 $ 1,700,000 1,500,000 Common stock 8,000,000 8,000,000 Retained earnings 4,650,000 $15,600,000 4,000,000 $13,700,000 Total liabilities and stockholders' equity