Fill in the answers on yellow highlighted spaces.

Exercise 14-6 Horizontal Analysis The following information for Great Oaks Furniture, a retail furniture and design firm, relates to exercises 14-6 through 14-11. December 31 2021 2020 Great Oaks Furniture Balance Sheets Assets Current Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Building and equipment, net Total assets $ 41,200 570,000 5,586,400 83,800 6,281,400 1,097,000 $ 7,378,400 $ 53,000 443,000 4,841,000 78,000 5,415,000 1,095,000 $ 6,510,000 Liabilities and Stockholders' equity Current liabilities Accounts payable Bank loan payable Other accrued payables Total current liabilities Long-term debt Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liab. and stockholders' equity $ 604,000 679,000 213,000 1,496,000 1,729,000 3,225,000 $ 624,000 625,000 313,000 1,562,000 1,797,000 3,359,000 1,359,000 2,794,400 4,153,400 $ 7,378,400 1,359,000 1,792,000 3,151,000 $ 6,510,000 Year Ended December 31 2021 2020 $ 5,568,000 $ 5,253,000 2,840,000 2,627,000 2,728,000 2,626,000 Great Oaks Furniture Statements of Earnings Net sales Cost of goods sold Gross margin Operating expenses: Selling expenses General and admin. expenses Total operating expenses Operating income Interest expense Income before taxes Income taxes Net income 501,000 835,000 1,336,000 1,392,000 139,000 1,253,000 250,600 $ 1,002,400 630,000 788,000 1,418,000 1,208,000 158,000 1,050,000 210,000 $ 840,000 Required Perform a horizontal analysis of the balance sheets and income statements for Great Oaks Furniture. Highlight changes at are greater than 10%. Year Ended December 31 2021 2020 Change Percent Change $ $ $ Balance Sheets Assets Current Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Building and equipment, net Total assets (270) 3,145 1,705 2,200 10,870 13,860 820 27,750 51,400 79,150 2,470 7,725 12, 155 620 22,970 53,400 76,370 200 4,780 (2,000) 2,780 $ $ $ $ $ 20,600 780 18,650 640 210 19,500 1,950 140 210 1,880 21,380 Liabilities and Stockholders' equity Current liabilities Accounts payable $ Bank loan payable Other accrued payables Total current liabilities Long-term debt Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liab. and stkhs' equity $ 32,380 30,500 1,880 13,650 33,120 46,770 79, 150 13,650 32,220 45,870 76,370 900 900 2,780 $ $ Percent Change $ Year Ended December 31 2021 2020 84,500 $ 83,000 56,900 56,600 27,600 26,400 Change $ 1,500 300 1,200 Great Oaks Furniture Statements of Earnings Net sales Cost of goods sold Gross margin Operating expenses: Selling expenses General and admin. exp. Total operating expenses Operating income Interest expense Income before taxes Income taxes Net income 14,400 8,800 23,200 4,400 1,200 3,200 640 2,560 13,500 8,400 21,900 4,500 1,000 3,500 700 2,800 900 400 1,300 (100) 200 (300) (60) (240) $ $ $ Discuss some of the causes that could lead to these changes. Balance sheet: Income statement