Question
Throughout the project, you have been asked a number of questions relating to the Balance Sheet of ABC Company. Using the Balance Sheet found below,
Throughout the project, you have been asked a number of questions relating to the Balance Sheet of ABC Company. Using the Balance Sheet found below, perform a horizontal analysis. Once complete, use your new version of the Balance Sheet to present and discuss the Balance Sheet of ABC Company using PowerPoint. Based on the inferences you make from your horizontal analysis, discuss any improvements and/or changes that may have occurred since the prior year.
Consider addressing the items that the Board of Directors requested information on throughout the project: (1) Accounts Receivables and the process for uncollectible accounts; (2) Payroll Liabilities as well as other Current or Long-Term liabilities; and (3) the types of investments held by ABC Company. Keep in mind the intended audience of your presentation.
ABC COMPANY | |||||
BALANCE SHEET | |||||
At December 31, 20X2 and December 31, 20X1 | |||||
20X2 | 20X1 | Dollar Change | % Change | ||
Assets | |||||
Current Assets | |||||
Cash and cash equivalents | $ | 247,225 | 168,010 | ||
Trading Securities | $ | 48,000 | 39,600 | ||
Accounts receivable | $ | 28,000 | 19,500 | ||
Allowance for doubtful accounts | -5,000 | -2,900 | |||
Accounts receivable, net | $ | 23,000 | 16,600 | ||
Inventories | $ | 2,450 | 3,600 | ||
Prepaid expenses and other receivables | $ | 1,200 | 750 | ||
Available-for-sale securities | $ | 17,750 | 14,005 | ||
Total current assets | $ | 339,625 | 242,565 | ||
Property, plant and equipment, net | $ | 404,550 | 299,050 | ||
Intangible Assets | $ | 300 | 300 | ||
Total assets | $ | 744,475 | 541,915 | ||
Liabilities and Shareholders' Equity | |||||
Current Liabilities | |||||
Salaries Payable | $ | 75,000 | 66,950 | ||
FICA-Social Security Taxes Payable | $ | 10,540 | 7,682 | ||
FICA-Medicare Taxes Payable | $ | 2,465 | 1,797 | ||
Employee Federal Income Taxes Payable | $ | 8,500 | 6,000 | ||
State Unemployment Taxes Payable | $ | 756 | 540 | ||
Federal Unemployment Taxes Payable | $ | 84 | 60 | ||
Notes payable or current portion of long-term debt | $ | 24,000 | 24,000 | ||
Accounts payable | $ | 15,030 | 17,050 | ||
Total current liabilities | $ | 136,375 | 124,079 | ||
Long-term debt | $ | 204,400 | 128,400 | ||
Total liabilities | $ | 340,775 | 252,479 | ||
Shareholders' equity | |||||
Common stock, $10 per value; 50,000 shares authorized; 20,000 shares issued and outstanding | $ | 275,000 | 220,000 | ||
Retained earnings | $ | 128,700 | 69,436 | ||
Total shareholders' equity | $ | 403,700 | 289,436 | ||
Total liabilities and shareholders' equity | $ | 744,475 | 541,915 |
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