F. Luchessi Inc.				F. Luchessi Inc.
Income Statement				Comparative Balance Sheets
For years ended December 31, 2017 and 2018				December 31, 2018 and 2017
					2018	2017	Change
	2018	2017		Current assets:
Sales (all on credit)	$619,000	$588,000		Cash	$62,730	$32,100	$30,630
Cost of goods sold	(345,000)	(283,000)		Accounts receivable (net)	43,000	36,000	7,000
Gross margin	274,000	305,000		Inventory	48,000	46,000	2,000
				Prepaid expenses	1,600	3,500	-1,900
Depreciation expense	37,000	52,000		Other current assets	2,230	3,400	-1,170
Other operating expenses	132,000	110,000		Total current assets	157,560	121,000	36,560
Total operating expenses	169,000	162,000
Operating income	105,000	143,000		Long-term Investments	86,000	60,000	26,000
Other income (expenses)				Plant assets	312,000	261,000	51,000
Interest expense	(5,000)	(3,700)		Less: accumulated depreciation	(78,600)	(52,000)	26,600
Gain on sale of investments	6,300	4,400		Total plant assets	233,400	209,000	24,400
Loss on sale of plant assets	(3,500)	(4,200)		Total assets	476,960	390,000	86,960
Total other income (expenses)	(14,800)	(3,500)
				Current liabilities:
Income before income taxes	102,800	139,500		Accounts payable	$29,400	$30,000	$-600
Income taxes expense	(30,840)	(41,850)		Accrued liabilities	7,200	6,000	1,200
Net income	$71,960	$97,650		Income taxes payable	2,400	9,000	-6,600
				Total current liabilities	39,000	45,000	-6,000
F. Luchessi Inc.				Long term liabilities:
Statement of Retained Earnings				Notes Payable	249,000	185,000	64,000
For the year ended December 31, 2018				Total liabilities	288,000	230,000	58,000
	2018	2017
Ret. earnings, Jan. 1	$35,000	$0		Stockholders' equity
Add: net income	71,960	97,650		Common stock, $5 par value	100,000	100,000	0
Deduct: Dividends	(43,000)	(62,650)		Additional paid-in capital	25,000	25,000	0
Increase in retained earnings	28,960	35,000		Retained earnings	63,960	35,000	28,960
Ret. earnings, Dec. 31	$63,960	$35,000		Total stockholders’ equity	188,960	160,000	28,960
				Total liabilities and stockholders’ equity	$476,960	$390,000	$86,960
Other information:
Shares of common stock outstanding	20,000	20,000
Earnings per share	$3.6	$4.88
Dividends per share	$2.15	$3.13
Market price per share, common stock	$16	$13

  
 

Transcribed Image Text:

Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Ratios from Oper Inc St. Bal St. Inc St Bal Sheet Requirement Prepare a vertical analysis on the partial balance sheets for 2017 and 2018. Enter decreases as negative amounts/percents. Current assets: Cash Accounts receivable (net) Inventory Prepaid expenses Other current assets Total current assets Long-term investments Plant assets Less: accumulated depreciation Total plant assets Total assets F. Luchessi Inc. Partial Balance Sheet (Horizontal Analysis) For the years ended December 31, 2018 and 2017 2018 2017 Increase/decrease Amount Percent Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis from Oper Bal Sheet Inc St Bal St. Inc St Requirement Prepare a vertical analysis on the partial income statements for 2017 and 2018. Enter decreases as negative amounts/percents. Sales Cost of goods sold Gross margin Expenses F. Luchessi Inc. PARTIAL INCOME STATEMENT (HORIZONTAL ANALYSIS) For the years ended December 31, 2017 and 2018 Depreciation expense Other operating expenses Total operating expenses Operating income $ 2018 0 2017 $ 588,000 0 0 $ 588,000 110,000 110,000 478,000 Ratios < Cash Flows from Oper Increase/decrease Amount Percent Horiz Analysis Bal St > Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Ratios from Oper Inc St Bal St. Inc St Bal Sheet Requirement Prepare a vertical analysis on the partial income statements for 2017 and 2018. Sales Cost of goods sold Gross margin Expenses Depreciation expense Other operating expenses Total operating expenses Operating income F. Luchessi Inc. Partial Income Statement (Vertical analysis) For the years ended December 31, 2018 and 2017 S 2018 < Horiz Analysis Bal St 0 0 0 % $ $ 2017 588,000 588,000 110,000 110,000 478,000 Vertic Analysis Bal Sheet > % Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Ratios from Oper Inc St. Bal St. Inc St Bal Sheet Requirement Prepare a vertical analysis on the partial balance sheets for 2017 and 2018. Enter decreases as negative amounts/percents. Current assets: Cash Accounts receivable (net) Inventory Prepaid expenses Other current assets Total current assets Long-term investments Plant assets Less: accumulated depreciation Total plant assets Total assets F. Luchessi Inc. Partial Balance Sheet (Horizontal Analysis) For the years ended December 31, 2018 and 2017 2018 2017 Increase/decrease Amount Percent Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis from Oper Bal Sheet Inc St Bal St. Inc St Requirement Prepare a vertical analysis on the partial income statements for 2017 and 2018. Enter decreases as negative amounts/percents. Sales Cost of goods sold Gross margin Expenses F. Luchessi Inc. PARTIAL INCOME STATEMENT (HORIZONTAL ANALYSIS) For the years ended December 31, 2017 and 2018 Depreciation expense Other operating expenses Total operating expenses Operating income $ 2018 0 2017 $ 588,000 0 0 $ 588,000 110,000 110,000 478,000 Ratios < Cash Flows from Oper Increase/decrease Amount Percent Horiz Analysis Bal St > Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Ratios from Oper Inc St Bal St. Inc St Bal Sheet Requirement Prepare a vertical analysis on the partial income statements for 2017 and 2018. Sales Cost of goods sold Gross margin Expenses Depreciation expense Other operating expenses Total operating expenses Operating income F. Luchessi Inc. Partial Income Statement (Vertical analysis) For the years ended December 31, 2018 and 2017 S 2018 < Horiz Analysis Bal St 0 0 0 % $ $ 2017 588,000 588,000 110,000 110,000 478,000 Vertic Analysis Bal Sheet > %

Answer rating: 100% (QA)

Horizon Analysis of Income statement Increasedecrease 2018 2017 Amount Sales 619000 588000 31000 527 Cost of goods sold 345000 283000 62000 2191 Gross ... View the full answer