subject:financial statement analysis 450

QUESTION 4- (15 pts) Evaluate the below trend in Sales and COGS of company XYZ considering the following inflation rates in the country. 2018 2019 130 2017 100 Sales. Cost of goods sold. 110 108 120 100 Inflation increased by 5 % from the end of 2017 to the end of 2018. Inflation increased by 15 % from the end of 2018 to the end of 2019. QUESTION 5-(20 pts) Below is the cost and accumulated depreciation information for the only building of Company A that was purchased on January 1, 2019. In the end of 2019, company decided to use straight line depreciation, but changed the method and started to use double declining method at the end of 2020. 31 Dec 2020 31 Dec 2019 Building 100,000 100,000 (-) Accumulated Depreciation (43,000) (5,000) 57,000 95,000 Answer the following questions. a) What is the useful life of the building? Show your calculation. (5 pts) b) Why would company make this change? (7.5 pts, 75 words) c) If you were an analyst, before starting financial analysis, what adjustments would you like to make on 31 Dec 2020 Balance Sheet and Income Statement of Company A in the context of accounting analysis. Support your comments with calculations. (7.5 pts) - Provide two of the possible adjustments, and tell the names of the accounts, and indicate the amounts you like to adjust