EXERCISES 1. Given the following balance sheet and income statement a. Complete both b. Prepare both the horizontal and vertical analysis. Highlight relevant changes, and comment on the main trends. Make your quality comments on your findings. 2019 2018 2019 2018 Assets Cash 39600 33600 Revenue Marketable securities 24000 26400 Sales 270000 234000 Notes Receivable 6000 3600 Less: Sales returns and allowances 4608 3300 Accounts Receivable 60000 67200 Net Sales Inventory 84000 51600 Cost of goods sold Prepaid expenses 7200 4800 Merchandise inventory, January 1 79200 86400 Total current assets Purchases less returns and allowances 117600 96000 Property, plant, and equipment 408000 372000 Total Cost of merchandise available for sale Total assets Less: Merchandise inventory, March 31 72270 73200 Cost of goods sold Liabilities Gross Profit Accounts payable 49200 45600 Operating expenses Salaries payable 2400 4200 Delivery expenses 561 240 Taxes payable 4800 2400 Depreciation expense-equipment 4320 4320 Total current liabilities Payroll taxes expense 466 354 Long term Liabilities 120000 120000 Salary expense 12887 12600 Total liabilities Supplies expense 245 360 Telephone expense 210 252 Stockholder's equity: Utilities expense 2289 1800 Preferred Stock 48000 48000 Total operating expenses Common stock 210000 174600 Net Income before income tax Retained earnings 194400 164400 Income tax (20%) Net income after income tax Total stockholder's equity Total liabilities and stockholders equity