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ABC Merchandising

Income Statement
For the year ended December 31, 2018

Horizontal Analysis 2018 2017 Peso Change % Change

Sales ₱1,000,000 ₱800,000

Less : Cost of Goods Sold

Merchandise Inventory, Beginning 20,000 25,000

Purchases 700,000 450,000

Total Goods Available for Sale 720,000 475,000

Merchandise Inventory, Ending (41,000) (30,500)

Cost of Goods Sold (679,000) (444,500)

Gross Profit 321,000 355,500

Operating Expenses (120,000) (75,000)

Earnings before Interest and Taxes 201,000 280,500

Interest Expense (2,500) (2,500)

Earnings before Tax 198,500 278,000

Income Tax Expense (63,520) (88,960)

Net Income ₱134,980 ₱189,040


ABC Merchandising
Income Statement
For the year ended December 31, 2018

Vertical Analysis 2018 % of Sales

Sales ₱1,000,000

Less : Cost of Goods Sold

Merchandise Inventory, Beginning 30,500

Purchases 700,000

Total Goods Available for Sale 730,500

Merchandise Inventory, Ending (41,000)

Cost of Goods Sold (689,500)

Gross Profit 310,500

Operating Expenses (120,000)

Earnings before Interest and Taxes 190,500

Interest Expense (2,500)

Earnings before Tax 188,000

Income Tax Expense (60,160)

Net Income ₱127,840


ABC Merchandising
Statement of Financial Position
December 31, 2018
(Horizontal Analysis)
ASSETS 2018 2017 Peso %Change
Change
Cash ₱75,000 ₱64,000 ₱11,000 17.19%
Marketable Securities 30,000 30,000
Accounts Receivable 45,000 50,000
Merchandise Inventory 41,000 30,500
Prepaid Expenses 5,000 5,000
Total Current Assets 196,000 179,500
Property, Plant and Equipment 350,000 320,000
(net)
TOTAL ASSETS ₱546,000 ₱499,500
LIABILTIES & OWNER’S
EQUITY
Accounts Payable ₱29,000 ₱20,000
Salaries Payable 25,000 16,000
Utilities Payable 12,000 7,000
Taxes Payable 30,000 30,000
Total Current Liabilities 96,000 73,000
Notes Payable (due 2020) 200,000 200,000
Total Liabilities 296,000 273,000
Owner’s Equity 250,000 226,500
TOTAL LIABILITIES & ₱546,000 ₱499,500
EQUITY
ABC Merchandising
Statement of Financial Position
December 31, 2018
(Vertical Analysis)
ASSETS 2018 % of total assets
Cash ₱75,000 13.74%
Marketable Securities 30,000
Accounts Receivable 45,000
Merchandise Inventory 41,000
Prepaid Expenses 5,000
Total Current Assets 196,000
Property, Plant and Equipment 350,000
(net)
TOTAL ASSETS ₱546,000
LIABILTIES & OWNER’S EQUITY
Accounts Payable ₱29,000
Salaries Payable 25,000
Utilities Payable 12,000
Taxes Payable 30,000
Total Current Liabilities 96,000
Notes Payable (due 2020) 200,000
Total Liabilities 296,000
Owner’s Equity 250,000
TOTAL LIABILITIES & EQUITY ₱546,000