PA13-1 (Algo) Analyzing Financial Statements Using Horizontal Analyses [LO 13-2, 13-5]

Pinnacle Plus declared and paid a cash dividend of $6,300 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information:

Required:

1. Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements. 2-a. Which account increased by the largest dollar amount? 2-b. Which account increased by the largest percentage?

• Req 1
• Req 2A
• Req 2B

Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.)

PINNACLE PLUS
Horizontal Analysis
			Increase (Decrease) in the Current year (versus the Previous year)
	Current Year	Previous Year	Amount	Percentage
Income Statement
Sales Revenue	$123,000	$108,100	$14,900	13.8	%
Cost of Goods Sold	54,600	49,300	5,300	10.8
Gross Profit	68,400	58,800	9,600	16.3
Operating Expenses	34,500	31,800	2,700	8.5
Interest Expense	3,700	3,700	0	0.0
Income before Income Tax Expense	30,200	23,300	6,900	29.6
Income Tax Expense (30%)	9,060	6,990	2,070	29.6
Net Income	$21,140	$16,310	$4,830	29.6	%
Balance Sheet
Cash	$75,376	$37,100			%
Accounts Receivable, Net	17,600	10,600
Inventory	24,700	37,400
Property and Equipment, Net	94,700	103,500
Total Assets	$212,376	$188,600			%
Accounts Payable	$44,600	$36,300			%
Income Tax Payable	1,736	1,100
Note Payable (long-term)	37,000	37,000
Total Liabilities	83,336	74,400
Common Stock (par $10)	87,000	87,000
Retained Earnings	42,040	27,200
Total Liabilities and Stockholders Equity	$212,376	$188,600			%