Presented Below Is a Comparative Balance Sheet for VTeck Corporation

question 114

Essay

Presented below is a comparative balance sheet for VTeck Corporation for 2017 and 2016.Prepare a horizontal analysis of VTeck Corporation's balance sheet.
VTeck Corporation
Comparative Balance Sheet
December 31, 2017 and 2016 $\begin{array}{llr}\text { Assets }\\\text { Current assets }&2017&2016\\\text { Cash } & \$ 35,000 & \$ 20,000 \\\text { Accounts receivable (net) } & 35,000 & 25,000 \\\text { Merchandise inventory } & 45,000 & 40,000 \\\text { Prepaid expenses } & \underline{10,000} & \underline{5,000} \\\quad \text { Total current assets } & 125,000 & 90,000\end{array}$ Property,plant and equipment
$\begin{array}{lll}\text { Land } & 40,000 & 50,000 \\\text { Equipment } & 150,000 & 120,000 \\\text { Less: Accumulated amortization } & \underline{(45,000)} & \underline{(30,000)} \\\quad \text { Total assets } & \$ 270,000 & \$ 230,000\end{array}$ Liabilities
Current liabilities
$\begin{array}{lrr}\text { Accounts payable } & \$ 40,000 & \$ 35,000 \\\text { Salary payable } & \underline{15,000} & \underline{10,000} \\\text { Total current liabilities } & \underline{55,000} & \underline{45,000}\end{array}$ Shareholders' equity

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Definitions:

Standard Labour Cost

The predetermined cost assigned to labor based on expected productivity rates and wage rates.

Direct Labour

The labor costs associated directly with the manufacture of goods, including the wages of workers who are actively involved in the production process.

Standard Cost

The predetermined cost of manufacturing a single unit or a number of product units during a specific period, used for budgeting and performance evaluation.

Budget

A financial plan that estimates income and expenditure for a specific period of time.