Chapter 15: Q4SE (page 836)

Great Value Optical Company reported the following amounts on its balance sheet at
December 31, 2018 and 2017:
2018 2017
Cash and Receivables \( 80,640 \) 80,575
Merchandise Inventory 56,840 54,450
Property, Plant, and Equipment, Net 142,520 139,975
Total Assets \( 280,000 \) 275,000
Prepare a vertical analysis of Great Value’s assets for 2018 and 2017.

Expert verified

Answer

Cash and Cash Receivables decrease and Inventory Increases but Property plant and equipment remain constant.

Step by step solution

Great Value Optical Company
Balance Sheet (Partial)
December 31, 2018 and 2017
	2018		2017
	Amount	Percent of Total	Amount	Percent of Total
December 31, 2018 and 2017	80,640	28.8%	80,575	29.3%
Merchandise Inventory	56,840	20.3%	54,450	19.8%
Property, Plant and equipment, net	142,520	50.9%	139,97	50.9%
Total Assets	280,000	100.0%	275,000	100%

Great Value Optical Company
Balance Sheet (Partial)
December 31, 2018 and 2017
	2018		2017
	Amount	Percent of Total	Amount	Percent of Total
Cash and Receivables(a)	80,640	(a/d)	(a/d)	(a/d)
Merchandise Inventory(b)	(a/d)	(b/d)	(b/d)	(b/d)
Property, Plant and equipment, net(C)	(b/d)	(c/d)	(c/d)	(c/d)
Total Assets(d)	280,000	(d/d)	(d/d)	(d/d)

Unlock Step-by-Step Solutions & Ace Your Exams!

Over 30 million students worldwide already upgrade their learning with Vaia!

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Theta Designs INC
Vertical Analysis
For the year ended December 31, 2017, and 2018
Assets	2018 (\()	2017 (\))

Total current assets	25,000	73,440
Property, Plant and Equipment, Net	153,600	168,300
Other Assets	21,400	64,260
Total Assets	200,000	306,000

Liabilities
Total current liabilities	27,600	49,266
Long term debt	72,400	208,998
Total Liabilities	100,000	258,264

Stockholders’ Equity
Total stockholders’ Equity	100,000	47,736
Total liabilities and stockholders’ equity	200,000	306,000

SANFIELD, INC. Comparative Income Statement Years Ended December 31, 2018, and 2017
	2018	2017
Net Sales Revenue	\( 462,000	\) 430,000
Cost of Goods Sold	236,000	213,000
Gross Profit	226,000	217,000
Operating Expense	135,000	133,000
Income from Operations	91,000	84,000
Interest Expense	8,000	12,000
Income Before Income Tax	83,000	72,000
Income Tax Expense	18,000	22,000
Net Income	\( 65,000	\) 50,000

SANFIELD, INC. Comparative Balance Sheet December 31, 2018, and 2017
	2018	2017	2016
Asset
Current Assets:
Cash	\( 99,000	\) 97,000
Accounts Receivable, Net	109,000	117,000	\( 100,000
Merchandise Inventory	142,000	164,000	207,000
Prepaid Expenses	15,000	5,000
Total Current Assets	365,000	383,000
Property, Plant, and Equipment, Net	215,000	177,000
Total Assets	\) 580,000	\( 560,000	\) 599,000

Liabilities
Total Current Liabilities	\( 222,000	\) 244,000
Long-term Liabilities	113,000	92,000
Total Liabilities	335,000	336,000

Stockholders’ Equity
Preferred Stock, 4%	92,000	92,000
Common Stockholders’ Equity, no par	153,000	132,000	85,000
Total Liabilities and Stockholders’ Equity	\( 580,000	\) 560,000