T. Mulholland Income Statement For years ended December 31, 2017 and 2018 Sales (all on credit) Cost of goods sold Gross margin 2018 2017 $697,000 $662,000 (367,000) (301,000) 330,000 361,000 37,000 150,000 52,000 125,000 Depreciation expense Other operating expenses Total operating expenses Operating income 187,000 143,000 177,000 184,000 (5,000) (3,700) Other income (expenses) Interest expense Gain on sale of investments Loss on sale of plant assets Total other income (expenses) 6,900 4,800 (4,100) (4,900) (16,000) (3,800) Income before income taxes Income taxes expense Net income 140,800 180,200 (42,240) (54,060) $98,560 $126,140 T. Mulholland Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Change Current assets: Cash $72,040 $33,900 $38,140 Accounts receivable (net) 43,000 36,000 7,000 Inventory 48,000 46,000 2,000 Prepaid expenses 1,800 4,100 -2,300 Other current assets 2,620 4,000 -1,380 Total current assets 167,460 124,000 43,460 Long-term Investments 86,000 60,000 26,000 312,000 Plant assets Less: accumulated depreciation (78,600) 233,400 261,000 51,000 (52,000) 26,600 209,000 24,400 393.000 93.860 Total plant assets Total assets 486,860 Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities $29,400 2,400 3,500 35,300 $30,000 2,000 13,000 45,000 $-600 400 -9,500 -9,700 Long term liabilities: Notes Payable Total liabilities 249,000 284,300 185,000 64,000 230,000 54,300 Stockholders' equity Common stock, $5 par value Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 100,000 25,000 77,560 202,560 $486,860 100,000 25,0000 38,000 39,560 163,000 39,560 $393,000 $93,860 Cash Flows from Oper Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Inc St Bal St Inc St Bal Sheet Ratios Requirement Prepare a vertical analysis on the partial balance sheet for 2017 and 2018. T. Mulholland Partial Balance Sheet (Vertical analysis) For the years ended December 31, 2018 and 2017 2018 % Liabilities 2017 % $ Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Notes payable Total liabilities 14.80% 8.83% 9.86% 8.63% 9.16% 11.70% 72,040 43,000 48,000 163,040 249,000 412,040 33,900 36,000 46,000 115,900 185,000 300,900 Stockholders' Equity Common stock, $5 par Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 412,040 $ 300,900 T. Mulholland Income Statement For years ended December 31, 2017 and 2018 Sales (all on credit) Cost of goods sold Gross margin 2018 2017 $697,000 $662,000 (367,000) (301,000) 330,000 361,000 37,000 150,000 52,000 125,000 Depreciation expense Other operating expenses Total operating expenses Operating income 187,000 143,000 177,000 184,000 (5,000) (3,700) Other income (expenses) Interest expense Gain on sale of investments Loss on sale of plant assets Total other income (expenses) 6,900 4,800 (4,100) (4,900) (16,000) (3,800) Income before income taxes Income taxes expense Net income 140,800 180,200 (42,240) (54,060) $98,560 $126,140 T. Mulholland Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Change Current assets: Cash $72,040 $33,900 $38,140 Accounts receivable (net) 43,000 36,000 7,000 Inventory 48,000 46,000 2,000 Prepaid expenses 1,800 4,100 -2,300 Other current assets 2,620 4,000 -1,380 Total current assets 167,460 124,000 43,460 Long-term Investments 86,000 60,000 26,000 312,000 Plant assets Less: accumulated depreciation (78,600) 233,400 261,000 51,000 (52,000) 26,600 209,000 24,400 393.000 93.860 Total plant assets Total assets 486,860 Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities $29,400 2,400 3,500 35,300 $30,000 2,000 13,000 45,000 $-600 400 -9,500 -9,700 Long term liabilities: Notes Payable Total liabilities 249,000 284,300 185,000 64,000 230,000 54,300 Stockholders' equity Common stock, $5 par value Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 100,000 25,000 77,560 202,560 $486,860 100,000 25,0000 38,000 39,560 163,000 39,560 $393,000 $93,860 Cash Flows from Oper Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Inc St Bal St Inc St Bal Sheet Ratios Requirement Prepare a vertical analysis on the partial balance sheet for 2017 and 2018. T. Mulholland Partial Balance Sheet (Vertical analysis) For the years ended December 31, 2018 and 2017 2018 % Liabilities 2017 % $ Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Notes payable Total liabilities 14.80% 8.83% 9.86% 8.63% 9.16% 11.70% 72,040 43,000 48,000 163,040 249,000 412,040 33,900 36,000 46,000 115,900 185,000 300,900 Stockholders' Equity Common stock, $5 par Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 412,040 $ 300,900