Q3TI - Horngren'S Financial And Managerial Accounting

Question

Monroe Corp. reported the following amounts on its balance sheet at December 31, 2018 and 2017:

2018, 2017

Cash and Receivables \( 35,000 \) 40,000

Merchandise Inventory 20,000 15,000

Property, Plant, and Equipment, Net 80,000 60,000

Total Assets \( 135,000 \) 115,000

Prepare a vertical analysis of Monroe Corp. for 2018 and 2017.

Step-by-Step Solution

Answer

Answer

Vertical analysis of Monroe Corp is given below indicating that value of current assets increase in balance sheet.

Step 1: Calculations

Balance Sheet(partial) Dec 31, 2018 and 2017
	2018($)	Percent of Total	2017($)	Percent of Total
Cash & receivables	35,000	35,000	35,000	35,000
Merchandise Inventory	20,000	20,000	15,000	15,000
Property plant and Equipment	80,000	59.26%	60,000	52.17%
Total Assets	135,000	100%	115,000	100%

Step 2: Workings

Balance Sheet(partial) Dec 31, 2018 and 2017
	2018($)	Percent of Total	2017($)	Percent of Total35,000
Cash & receivables	35,000	(35,000/135,000)*100	40,000	(40,000/115,000)*100
Merchandise Inventory	Total Assets	(20,000/135,000)*100	15,000	(15,000/115,000)*100
Property plant and Equipment	80,000	(80,000/135,000)*100	60,000	(60,000/115,000)*100
Total Assets	135,000	100%	115,000