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  • Am Co. HV Analyses (Problem)

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    Neil Ryan Pontanares
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    - AM Co.'s total assets decreased 92.2% from 20x0 to 20x1 due to decreases in cash, accounts receivable, and inventory, despite increases in property, plant & equipment. - Total liabilities decreased 2.5% as increases in accounts payable were offset by decreases in notes payable. - Owner's capital decreased 41.3% resulting in an overall 92.2% decrease in total liabilities and equity. - While sales increased 65% from 20x0 to 20x1, cost of sales and expenses also rose, leading to a 1,002,000 or 19.3% decrease in profit for the year.

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    Am Co. Hv Analyses(Problem)

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    - AM Co.'s total assets decreased 92.2% from 20x0 to 20x1 due to decreases in cash, accounts receivable, and inventory, despite increases in property, plant & equipment. - Total liabilities decreased 2.5% as increases in accounts payable were offset by decreases in notes payable. - Owner's capital decreased 41.3% resulting in an overall 92.2% decrease in total liabilities and equity. - While sales increased 65% from 20x0 to 20x1, cost of sales and expenses also rose, leading to a 1,002,000 or 19.3% decrease in profit for the year.

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    7 views1 page

    Am Co. HV Analyses (Problem)

    Uploaded by

    Neil Ryan Pontanares
    - AM Co.'s total assets decreased 92.2% from 20x0 to 20x1 due to decreases in cash, accounts receivable, and inventory, despite increases in property, plant & equipment. - Total liabilities decreased 2.5% as increases in accounts payable were offset by decreases in notes payable. - Owner's capital decreased 41.3% resulting in an overall 92.2% decrease in total liabilities and equity. - While sales increased 65% from 20x0 to 20x1, cost of sales and expenses also rose, leading to a 1,002,000 or 19.3% decrease in profit for the year.

    Copyright:

    © All Rights Reserved
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    of 1

    AM Co.

    Balance Sheets
    As of December 31, 20x1 and 20x0
    (a)
    (30,000 in 20x1 – 80,000 in 20x0) = 50,000 decrease ÷ 80,000 in 20x0 = -62.50%
    ASSETS 20x1 20x0 Increase(Decrease) Percent
    Cash and cash equivalents  ₱30,000 ₱80,000 50,000 decrease -62.50%
    Accounts receivable – net 1,672,000 304,000 1,368,000 decrease -22.20%
    Inventory 500,000 300,000 200,000 decrease -66.60%
    Prepaid assets 48,000 50,000 2,000 increase 25%
    Total current assets 2,250,000 734,000 1,516,000 decrease -48.40%
    Property, plant and equipment 780,000 720,000 60,000 increase 12%
    Total noncurrent assets 780,000 720,000 60,000 increase 12%
    TOTAL ASSETS ₱3,030,000 ₱1,454,000 1,576,000 decrease -92.20%

    LIABILITIES
    Accounts payable – net ₱980,000 ₱420,000 560,000 increase 75%
    Notes payable (current portion) 180,000 180,000 0 0%
    Total current liabilities 1,160,000 600,000 560,000 decrease -1.0%
    Notes payable (noncurrent Portion) 180,000 360,000 180,000 increase 2%
    Total noncurrent liabilities 180,000 360,000 180,000 increase 2%
    TOTAL LIABILITIES 1,340,000 960,000 380,000 decrease -2.50%

    EQUITY
    Owner’s capital 1,690,000 494,000 1,196,000 decrease -41.30%
    TOTAL LIABILITY & EQUITY ₱3,030,000 ₱1,454,000 1,576,000 decrease -92.20%

    AM Co.
    Income Statements
    For the years ended December 31, 20x1 and December 20x0

    20x1 20x0 Increase(Decrease) Percent


    Sales  ₱4,000,000 ₱2,400,000 1,600,000 increase 1.5%
    Cost of slaes (1,400,000) (900,000) 500,000 increase 1.8%
    GROSS PROFIT 2,600,000 1,500,000 1,100,000 decrease -1.30%
    Salaries expense (780,000) (780,000) 0 0%
    Utilities expense (120,000) (120,000) 0 0%
    Rent expense (156,000) (156,000) 0 0%
    Depreciation expense (240,000) (180,000) 60,000 increase 3%
    Bad debts expense (72,000) (16,000) 56,000 decrease -28.50%
    Interest expense (36,000) (54,000) 18,000 increase 3%
    PROFIT FOR THE YEAR ₱1,196,000 ₱194,000 1,002,000 decrease -19.30%

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