Horizontal Analysis of Comparative Financial Statements A comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are shown. Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 20-1 $425,830 Net Sales (all on account) Cost of goods sold $657,830 386,890 255,360 Gross profit $270,940 $170,470 Administrative expenses $63,068 $42,699 Selling expenses 66,874 44,095 Total operating expenses $129,942 $86,794 Operating income $83,676 $140,998 1,304 Interest expense 1,215 Income before income taxes $139,694 $82,461 Income tax expense 31,247 14,000 Net income $108,447 $68,461 Miller Electronics Corporation Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1 Assets Current assets: Cash $22,963 $43,630 72,928 91,878 Receivables (net) Merchandise inventory 47,790 50,123 Supplies and prepayments 3,762 1,156 Total current assets $212,198 $122,032 $11,948 $8,300 Property, plant, and equipment: Office equipment (net) Factory equipment (net) Total property, plant, and equipment 105,486 71,560 $117,434 $79,860 $201,892 Total assets $329,632 Liabilities Current liabilities Notes payable $10,480 $5,980 29,914 Accounts payable Accrued and withheld payroll taxes 42,994 6,350 5,510 Total current liabilities $59,824 $41,404 $84,000 Stockholders' Equity Common stock ($10 par) Retained earnings Total stockholders' equity $100,000 169,808 76,488 $160,488 $269,808 $329,632 Total liabilities and stockholders' equity $201,892 Required: Prepare a horizontal analysis. Enter the amount of increase (decrease) and the percentage change. Round percentages to one decimal place. Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 20-1 Increase Percent Amount Amount (Decrease) Net sales (all on account) $657,830 $425,830 Cost of goods sold 386,890 255,360 Gross profit $270,940 $170,470 $ Administrative expenses $63,068 $42,699 $ Selling expenses 66,874 44,095 Total operating expenses $129,942 $86,794 $ Operating income $140,998 $83,676 $ Interest expense 1,304 1,215 Income before income taxes $139,694 $82,461 $ Income tax expense 31,247 14,000 Net income $108,447 $68,461 $ Miller Electronics Corporation Comparative Balance Sheet December 31, 20-2 and 20-1 Assets 20-2 Amount 20-1 Increase Amount (Decrease) Percent Current assets: Cash $43,630 $22,963 $ Receivables (net) 72,928 47,790 Merchandise inventory 91,878 50,123 Supplies and prepayments 3,762 1,156 Total current assets $212,198 $122,032 WII 11 Property, plant, and equipment: Office equipment (net) $11,948 $8,300 $ Factory equipment (net) 105,486 71,560 Total prop., plant, and equip. $117,434 $79,860 Total assets $329,632 $201,892 Liabilities Current liabilities: Notes payable $10,480 $5,980 Accounts payable 42,994 29,914 Accrued and withheld payroll taxes 6,350 5,510 Total current liabilities $59,824 $41,404 Stockholders' Equity $100,000 $84,000 Common stock ($10 par) Retained earnings 169,808 76,488 1101 Total stockholders' equity $269,808 $160,488 Total liab. and stockholders' equity $329,632 $201,892
