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Quiz1 Problem Solution

The document contains comparative income statements and balance sheets for ABC Company for the years ended December 31, 2022 and 2021. It shows that the company's revenue and expenses increased by 20-80% in 2022 resulting in a 5.33% increase in net profit. Total assets grew by 25% to $250,000 in 2022 driven by increases in current assets, property, and land. Liabilities also rose by 36.36% while stockholder's equity increased by 11.11% in 2022.

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34 views

Quiz1 Problem Solution

The document contains comparative income statements and balance sheets for ABC Company for the years ended December 31, 2022 and 2021. It shows that the company's revenue and expenses increased by 20-80% in 2022 resulting in a 5.33% increase in net profit. Total assets grew by 25% to $250,000 in 2022 driven by increases in current assets, property, and land. Liabilities also rose by 36.36% while stockholder's equity increased by 11.11% in 2022.

Uploaded by

Vee Ya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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ABC Company

Comparative Income Statement


For the year ended December 31

HORIZONTAL ANALYSIS Percentage


2022 2021 Peso Change Change

Revenue 120,000.00 100,000.00 20,000.00 20.00%


Cost of Sales 60,000.00 50,000.00 10,000.00 20.00%
Gross Profit 60,000.00 50,000.00 10,000.00 20.00%

Rent Expense 5,500.00 5,000.00 500.00 10.00%


Depreciation Expense 3,600.00 2,500.00 1,100.00 44.00%
Salaries Expense 5,400.00 3,000.00 2,400.00 80.00%
Utilities Expense 2,500.00 1,500.00 1,000.00 66.67%
Net profit before interest and tax 43,000.00 38,000.00 5,000.00 13.16%

Interest Expense 5,400.00 3,000.00 2,400.00 80.00%


Income Tax 6,000.00 5,000.00 1,000.00 20.00%
Net profit after interest and tax 31,600.00 30,000.00 1,600.00 5.33%

ABC Company
Comparative Income Statement
For the year ended December 31

VERTICAL ANALYSIS 2022 2021 2022 2021

Revenue 120,000.00 100,000.00 100.00% 100.00%


Cost of Sales 60,000.00 50,000.00 50.00% 50.00%
Gross Profit 60,000.00 50,000.00 50.00% 50.00%

Rent Expense 5,500.00 5,000.00 4.58% 5.00%


Depreciation Expense 3,600.00 2,500.00 3.00% 2.50%
Salaries Expense 5,400.00 3,000.00 4.50% 3.00%
Utilities Expense 2,500.00 1,500.00 2.08% 1.50%
Net profit before interest and tax 43,000.00 38,000.00 35.83% 38.00%

Interest Expense 5,400.00 3,000.00 4.50% 3.00%


Income Tax 6,000.00 5,000.00 5.00% 5.00%
Net profit after interest and tax 31,600.00 30,000.00 26.33% 30.00%

ABC Company
Comparative Balance Sheet
For the year ended December 31

HORIZONTAL ANALYSIS 2022 2021 Percentage


Peso Change Change
Assets
Current Assets 110,000.00 90,000.00 20,000.00 22.22%
Cash 30,000.00 20,000.00 10,000.00 50.00%
Accounts Receivable 40,000.00 35,000.00 5,000.00 14.29%
Inventory
Non-current assets
Property Plant and Equipment 50,000.00 40,000.00 10,000.00 25.00%
Land 20,000.00 15,000.00 5,000.00 33.33%
Total Assets 250,000.00 200,000.00 50,000.00 25.00%

Liabilities
Current Liabilities
Accounts Payable 75,000.00 60,000.00 15,000.00 25.00%
Unearned Revenue 25,000.00 10,000.00 15,000.00 150.00%
Non-current Liabilities
Bank Loan 50,000.00 40,000.00 10,000.00 25.00%
Total Liabilities 150,000.00 110,000.00 40,000.00 36.36%

Stockholders' Equity
Share capital 80,000.00 75,000.00 5,000.00 6.67%
Retained Earnings 20,000.00 15,000.00 5,000.00 33.33%
Total Equity 100,000.00 90,000.00 10,000.00 11.11%

ABC Company
Comparative Balance Sheet
For the year ended December 31

VERTICAL ANALYSIS 2022 2021 2022 2021


Assets
Current Assets 110,000.00 90,000.00 44.00% 45.00%
Cash 30,000.00 20,000.00 12.00% 10.00%
Accounts Receivable 40,000.00 35,000.00 16.00% 17.50%
Inventory
Non-current assets
Property Plant and Equipment 50,000.00 40,000.00 20.00% 20.00%
Land 20,000.00 15,000.00 8.00% 7.50%
Total Assets 250,000.00 200,000.00 100.00% 100.00%

Liabilities
Current Liabilities
Accounts Payable 75,000.00 60,000.00 30.00% 30.00%
Unearned Revenue 25,000.00 10,000.00 10.00% 5.00%
Non-current Liabilities
Bank Loan 50,000.00 40,000.00 20.00% 20.00%
Total Liabilities 150,000.00 110,000.00 60.00% 55.00%

Stockholders' Equity
Share capital 80,000.00 75,000.00 32.00% 37.50%
Retained Earnings 20,000.00 15,000.00 8.00% 7.50%
Total Equity 100,000.00 90,000.00 40.00% 45.00%

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