Horizontal and vertical analysis. The following financial statements pertain to Waterloo Corporation:

WATERLOO CORPORATION Comparative Balance Sheets December 31,20X5 and 20X4
	20X5	20X4
Assets
Current Assets
Cash	$ 12,250	$ 13,400
Accounts Receivable (net)	19,500	25,900
Inventories	39,500	35,900
Prepaid Expense	__4,750	__4,650
Total Current Assets	$ 73,000	$ 71,150
Property, Plant, and Equipment
Buildings (net)	$ 103,750	$ 102,150
Equipment (net)	29,500	30,900
Vehicles (net)	33,000	40,900
Total Property, Plant, and Equipment	$ 164,250	$ 172,150
Trademarks (net)	__$ 15,750	__$ 3,400
Total assets	$ 251,000	$ 250,900
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable	$ 50,000	$ 70,900
Notes Payable	14,500	40,900
Federal Taxes Payable	__3,500	__25,900
Total Current Liabilities	$ 66,000	$ 135,900
Long-Term Debt	__$ 51,000	__$ 25,900
Total Liabilities	$ 116,000	$ 160,900
Stockholders' Equity
Common Stock, $10 par	$ 26,000	$ 25,900
Retained Earnings	__111,000	__65,900
Total Stockholders' Equity	$ 136,000	$ 90,900
Total Liabilities and Stockholders' Equity	$ 251,000	$ 250,900

WATERLOO CORPORATION Comparative Income Statements For the Years Ending December 31, 20X5 and 20X4
	20X5	20X4
Net Sales	$ 575,000	$510,000
Cost of Goods Sold	__330,000	__250,000
Gross Profit	$ 220,000	$250,000
Operating Expense	__132,500	__100,000
Income Before Interest and Taxes	$ 87,500	$150,000
Interest Expense	__12,500	__3,000
Income Before Taxes	$ 75,000	$147,000
Income Tax Expense	__30,000	__58,800
Net Income	$ 45,000	$ 88,200

Instructions

Prepare a horizontal analysis of the balance sheet, showing dollar and percentage changes. Round all calculations in parts (a) and (b) to two decimal places.

Prepare a vertical analysis of the income statement by relating each item to net sales.

Briefly comment on the results of your analysis.

Current Assets	PLACE YOUR ANSWERS BELOW STARTING ON ROW 99
Cash	$12,250	$13,400
Accounts Receivable (net)	19,500	25,900
Inventories	39,500	35,900
Prepaid Expense	4,750	4,650
Total Current Assets	$73,000	$77,150
Buildings (net)	$103,750	$102,150
Equipment (net)	29,500	30,900
Vehicles (net)	33,000	40,900
Total Property, Plant, and Equipment	$164,250	$172,150
Trademarks (net)	$15,750	$3,400
Total assets	$251,000	$250,900
Accounts Payable	$50,000	$70,900
Notes Payable	14,500	40,900
Federal Taxes Payable	3,500	25,900
Total Current Liabilities	$66,000	$135,900
Long-Term Debt	$51,000	$25,900
Total Liabilities	$116,000	$160,900
Common Stock, $10 par	$26,000	$25,900
Retained Earnings	111,000	65,900
Total Stockholders' Equity	$136,000	$90,900
Total Liabilities and Stockholders' Equity	$251,000	$250,900
WATERLOO CORPORATION
Comparative Income Statements
For the Years Ending December 31, 20X5 and 20X4	20X5	20X4
Net Sales	575,000	510,000
Prepare a horizontal analysis of the balance sheet showing percentage changes from 20X4 to 20X5. Round all calculations in parts (a) and (b) to two decimal places.	Questions	YOUR ANSWERS BASED UPON COURSE START DATE
WATERLOO CORPORATION
Comparative Balance Sheets
December 31,20X5 and 20X4
Assets
Current Assets		% Change
Cash
Accounts Receivable (net)
Inventories
Prepaid Expense
Total Current Assets
Buildings (net)
Equipment (net)
Vehicles (net)
Total Property, Plant, and Equipment
Trademarks (net)
Total assets
Accounts Payable
Notes Payable
Federal Taxes Payable
Total Current Liabilities
Long-Term Debt
Total Liabilities
Common Stock, $10 par
Retained Earnings
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
WATERLOO CORPORATION
Comparative Income Statements
Prepare a vertical analysis of the 20X5 income statement by relating each item to net sales.		20X5
Net Sales
Cost of Goods Sold
Gross Profit
Operating Expense
Income Before Interest and Taxes
Interest Expense
Income Before Taxes
Income Tax Expense
Net Income