   Chapter 15, Problem 5AT ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# a. Use the following financial information to calculate the owner's equity and prepare a balance sheet with vertical analysis as of December 31, 2014, for Uniflex Fabricators, Inc., a sole proprietorship owned by Paul Provost: current assets, $132,500; property, plant, and equipment.$88,760; investments and other assets. $32,400; current liabilities.$51,150; and long-term liabilities, $87,490.Uniflex Fabricators, Inc.Balance SheetAs of December 31, 2014b. The following financial information is for Uniflex Fabricators, Inc., as of December 31, 2015. Calculate the owner’s equity for 2015 and prepare a comparative balance sheet with horizontal analysis for 2014 and 2015: current assets.$154,300; property, plant, and equipment, $124,650; investments and other assets,$20,000; current liabilities, $65,210; and long-term liabilities.$83,800.Uniflex Fabricators, Inc.Comparative Balance SheetAs of December 31, 2014 and 2015

(a)

To determine

To calculate: The owner’s equity and prepare a balance sheet of Uniflex Fabricators, Inc. for December 31,2014, a sole proprietorship owned by Paul Provost if current asset is $132,500, property, plant and equipment is$88,760, investments and other assets is $32,400, current liabilities is$51,150 and long-term liabilities is $87,490. Explanation Given Information: Uniflex Fabricators, Inc. for December 31,2014, a sole proprietorship’s the current asset is$132,500, property, plant and equipment is $88,760, investments and other assets is$32,400, current liabilities is $51,150 and long-term liabilities is$87,490.

Formula used:

Follow the steps to prepare a vertical analysis of a balance sheet,

Step 1: Using the percentage formula, Rate=Portion÷Base, to compute the percentage of each item on the balance sheet. Use each item as the portion and total assets as the base.

Step 2: Round each answer to the nearest tenth of a percent.

Step 3: Write the percent of each balance sheet item in a column to the right of the monetary amount.

Calculation:

Consider Uniflex Fabricators, Inc. for December 31,2014, a sole proprietorship’s the current asset is $132,500, property, plant and equipment is$88,760, investments and other assets is $32,400, current liabilities is$51,150 and long-term liabilities is $87,490. Compute % of Current Assets by dividing the current asset with total assets: % of Current Assets=Current AssetTotal assets=132,500253,600=52.2% Compute % of total of Property, Plant and Equipment by diving property, plant and equipment with total assets. % of Total of Property, Plant and Equipment=Property, Plant and EquipmentTotal Assets=88,760253,660=35% Compute % of Total Current Liabilities by dividing current liabilities with total liabilities and owner’s equity % of Total Current Liabilities=Current liabilitiesTotal Assets=51,150253,660=20.2% Compute % of long-term liabilities by dividing long-term liabilities with total liabilities and owner’s equity % of long-term liabilities=Long-term liabilitiesTotal assets=87,490253,660=34.5% Compute % of total liabilities; % of total liabilities=Total liabilitiesTotal assets=138,640253,660=54 (b) To determine To calculate: The owner’s equity and prepare a comparative balance sheet of Uniflex Fabricators, Inc. for December 31,2014 and 2015, if current asset is$154,300, property, plant and equipment is $124,650, investments and other assets is$20,000, current liabilities is $65,210 and long-term liabilities is$83,800.

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