Learning Task 6.4

(For numbers 1 to 5) The financial statements of Pierre Trading are given below:

2014 2013

Cash and Cash Equivalents 12,250 10,470

Receivables 9,065 8,055

Inventory 6,620 5,300

Prepaid Expenses 8,545 10,600

Total Current Assets 36,480 34,425

Other Assets. 92,500 78,685

Total Assets 128, 980 113,110

Total current liabilities 36,150 42,335

Long-term Liabilities 23, 990 18,960

Alain Pierre, Capital 68,840 51,815

Total Liabilities and Equity 128,980 113,110

2014

Sales P 104,705

Cost of Sales 32,275

Gross Profit 69,430

Selling Expenses 35,325

Administrative Expenses 12,815

Operating Income 1,290

Interest Expense 1,050

Net Income P 20,240

1. Horizontal analysis of 2014 Pierre's SFP would report a. Cash as 9,50% of total assets b. 17% increase in Prepaid expense c. 19% increase in cash d. All of the above 2. Vertical analysis of 2014 Pierre's SFP report a. Cash as 9,50% of total assets b. 17% increase in Prepaid expense c. 19% increase in cash d. All of the above 3. A common-size SCI for Pierre would report (amounts rounded ) a. Net income of 19% b. Sales of 100% c. Cost of sales at 34% d. All of the above 4. A common-size SFP for Pierre would report (amounts rounded) a. Current liabilities as 28% of total assets b. Owner's capital is 53% of total liabilities and equity c. Receivables is 7% of total liabilities and equity d. All of the above 5. Trend analysis will show which of the following? A. 15% increase in Current liabilities B. 33% increase in Owner's capital C. 19% increase in Long term liabilities D. All of the above