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Case Study 1 The balance sheet and income statement for ABC Company for the years 2015 and 2016 are as follows: 20152016 Cash$460$300 Accounts Receivable620480

Case Study 1

The balance sheet and income statement for ABC Company for the years 2015 and 2016 are as follows:

20152016

Cash$460$300

Accounts Receivable620480

Inventory1,000730

Total Assets$2,080$1,510

Accounts Payable$580$310

Notes Payable500100

Common Stock400400

Retained Earnings600700

Total liabilities and stockholders' equity$2,080$1,510

Income Statement

Net sales$550$840

Cost of goods sold120160

Gross Margin$430$680

Expenses:

Salaries$100$150

Warehousing Costs80120

Advertising6090

Taxes4575

Total Expenses$285$435

Net income$145$245

Perform vertical and/or horizontal analysis of the statements and identify two things that appear to be unusual and could be possible symptoms of fraud.

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