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    Basic Accounting Problem: Horizontal Analysis

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    Following is a comparative balance sheet for WorldView International Corporation:

    WorldView International Corporation
    Balance Sheet
    December 31, 2008 and 2007
    2008 2007
    Current assets
    Cash $ 10,000 $ 5,000
    Short-term investment 7,000 10,000
    Accounts receivable, net 30,000 23,000
    Inventory 37,000 35,000
    Prepaid expenses 4,000 3,000
    Total current assets $ 88,000 $76,000

    Property, plant, and equipment, net 33,300 35,000
    Other assets 27,000 22,500
    Total assets $148,300 $133,500

    Current liabilities
    Short-term borrowings $ 28,400 $ 13,900
    Accounts payable 20,000 22,500
    Total current liabilities $ 48,400 $ 36,400

    Long-term debt 37,500 33,000
    Total liabilities $ 85,900 $ 69,400

    Stockholder's equity
    Common stock, no par $ 20,000 $ 20,000
    Retained earnings 42,400 44,100
    Total stockholders' equity $ 62,400 $ 64,100
    Total liabilities and stockholders' equity $148,300 $133,500

    Required:
    a. Calculate and show the percentages that would appear in a horizontal analysis for this balance sheet.
    b. Indicate any positive and negative developments from one year to the next.

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    https://brainmass.com/business/accounting/basic-accounting-problem-horizontal-analysis-380556

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    Solution Summary

    The solution discusses a basic accounting problem and provides a horizontal analysis.

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