Question

Prepare a horizontal analysis of both the balance sheet and income statement.

BENSON COMPANY Horizontal Analysis of Balance Sheets 2019 2018 Percentage Change Assets Current assets Cash $17,700 $13,300 not attempted % Marketable securities 20,600 6,800 not attempted Accounts receivable (net) 54,100 46,900 not attempted Inventories 136,900 143,000 not attempted Prepaid items 26,200 11,800 not attempted Total current assets 255,500 221,800 not attempted Investments 27,000 20,900 not attempted Plant (net) 271,200 256,300 not attempted Land 29,700 25,000 not attempted Total long-term assets 327,900 302,200 not attempted Total assets $583,400 $524,000 not attempted Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $15,500 $5,000 not attempted Accounts payable 113,300 98,400 not attempted Salaries payable 20,100 14,300 not attempted Total current liabilities 148,900 117,700 not attempted Noncurrent liabilities Bonds payable 98,400 98,400 not attempted Other 31,800 26,200 not attempted Total noncurrent liabilities 130,200 124,600 not attempted Total liabilities 279,100 242,300 not attempted Stockholders' equity Preferred stock (par value $10, 4% cumulative, nonparticipating; 7,600 shares authorized and issued) 76,000 76,000 not attempted Common stock (no par; 50,000 shares authorized; 10,000 shares issued) 76,000 76,000 not attempted Retained earnings 152,300 129,700 not attempted Total stockholders' equity 304,300 281,700 not attempted Total liabilities & stockholders’ equity $583,400 $524,000 not attempted %

BENSON COMPANY
Horizontal Analysis of Income Statements
	2019	2018	Percentage Change
Revenues
Sales (net)	$231,000	$210,600	not attempted	%
Other revenues	8,700	5,700	not attempted
Total revenues	239,700	216,300	not attempted
Expenses
Cost of goods sold	118,100	101,800	not attempted
Selling, general, and administrative expenses	54,300	48,300	not attempted
Interest expense	6,800	6,000	not attempted
Income tax expense	21,700	20,700	not attempted
Total expenses	200,900	176,800	not attempted
Net income (loss)	$38,800	$39,500	not attempted	%

Answer 1

Solution

Please leave a comment if % is required in decimal place other than 1. Round off detail can be provided in comment.

BENSON COMPANY
Horizontal Analysis of Balance Sheets
	2019	2018	Percentage Change
Assets
Current assets
Cash	$    17,700.00	$ 13,300.00	33.1%
Marketable securities	$    20,600.00	$    6,800.00	202.9%
Accounts receivable (net)	$    54,100.00	$ 46,900.00	15.4%
Inventories	$ 136,900.00	$143,000.00	-4.3%
Prepaid items	$    26,200.00	$ 11,800.00	122.0%
Total current assets	$ 255,500.00	$221,800.00	15.2%
Investments	$    27,000.00	$ 20,900.00	29.2%
Plant (net)	$ 271,200.00	$256,300.00	5.8%
Land	$    29,700.00	$ 25,000.00	18.8%
Total long-term assets	$ 327,900.00	$302,200.00	8.5%
Total assets	$ 583,400.00	$524,000.00	11.3%
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Notes payable	$    15,500.00	$    5,000.00	210.0%
Accounts payable	$ 113,300.00	$ 98,400.00	15.1%
Salaries payable	$    20,100.00	$ 14,300.00	40.6%
Total current liabilities	$ 148,900.00	$117,700.00	26.5%
Noncurrent liabilities
Bonds payable	$    98,400.00	$ 98,400.00	0.0%
Other	$    31,800.00	$ 26,200.00	21.4%
Total noncurrent liabilities	$ 130,200.00	$124,600.00	4.5%
Total liabilities	$ 279,100.00	$242,300.00	15.2%
Stockholders' equity
Preferred stock (par value $10, 4% cumulative, nonparticipating; 7,600 shares authorized and issued)	$    76,000.00	$ 76,000.00	0.0%
Common stock (no par; 50,000 shares authorized; 10,000 shares issued)	$    76,000.00	$ 76,000.00	0.0%
Retained earnings	$ 152,300.00	$129,700.00	17.4%
Total stockholders' equity	$ 304,300.00	$281,700.00	8.0%
Total liabilities & stockholders’ equity	$ 583,400.00	$524,000.00	11.3%

Requirement 2

BENSON COMPANY
Horizontal Analysis of Income Statements
	2019	2018	Percentage Change
Revenues
Sales (net)	$ 231,000.00	$210,600.00	9.7%
Other revenues	$      8,700.00	$    5,700.00	52.6%
Total revenues	$ 239,700.00	$216,300.00	10.8%
Expenses
Cost of goods sold	$ 118,100.00	$101,800.00	16.0%
Selling, general, and administrative expenses	$    54,300.00	$ 48,300.00	12.4%
Interest expense	$      6,800.00	$    6,000.00	13.3%
Income tax expense	$    21,700.00	$ 20,700.00	4.8%
Total expenses	$ 200,900.00	$176,800.00	13.6%
Net income (loss)	$    38,800.00	$ 39,500.00	-1.8%

% change = (Value of 2019 minus valuer of 2018) divided by value of 2018.