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Chapter 15.I, Problem 34RE
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### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

### Contemporary Mathematics for Busin...

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

# Prepare the following statements on separate sheets of paper.a. Use the following financial information to calculate the owner’s equity and prepare a balance sheet with vertical analysis as of December 31. 2015. for Victory Lane Sporting Goods, a sole proprietorship owned by Kyle Pressman: current assets. $157.600; property, plant, and equipment.$42,000: investments and other assets. $38.700: current liabilities.$21.200: and long-term liabilities. $53,400.Victory Lane Sporting GoodsBalance SheetDecember 31.2015b. The following financial information is for Victory Lane Sporting Goods as of December 31. 2016: current assets,$175,300: property, plant, and equipment. $43,600: investments and other assets.$39,200: current liabilities. $27,700; and long-term liabilities.$51.000.Calculate the owner’s equity for 2016 and prepare a comparative balance sheet with horizontal analysis for 2015 and 2016.Victory Lane Sporting GoodsComparative Balance SheetDecember 31,2015 and 2016

(a)

To determine

To calculate: The amount of owner’s equity and the balance sheet with vertical analysis as of December 31, 2015 of Victory lane sporting goods owned by Kyle pressman which has current assets of $157,600, property, plant and equipment of$42,000, investment and other assets of $35,700, current liabilities of$21,200 and long term liabilities of 53,400.

Explanation

Given Information:

Victoria lane sporting goods owned by Kyle pressman which has current assets of $157,600, property, plant and equipment of$42,000, investment and other assets of $35,700, current liabilities of$21,200 and long term liabilities of 53,400.

Formula used:

The formula to compute the owner’s equity is,

Owner's equity=(Current assets+Property, plant and equipment+investment+other assets)(Current liabilities+Long term liabilities)

Follow the steps to prepare a balance sheet

Step 1: At the top of the page, write the name of the company, type of sheet and date of preparation

Step 2: Prepare a section labeled as Assets and list three heads as all Current Assets, Property, Plant and Equipment and Investments and Other Assets.

Step 3: Add the above three heads to obtain the Total Assets.

Step 4: Double underline Total Assets.

Step 5: Name a section as Liabilities and Owner’s Equity and make two sub-heads as Current Liabilities and Long-Term Liabilities.

Step 6: Sum the two heads of liabilities to obtain the Total Liabilities.

Step 7: Total the Owner’s or Stockholder’s Equity.

Step 8: Add the Total Liabilities and Owner’s Equity

Step 9: Double underline Total Liabilities and Owner’s Equity.

Calculation:

Consider that current assets are $157,600, property, plant and equipment are$42,000, investment and other assets are $35,700, current liabilities are$21,200 and long term liabilities are 53,400.

Compute total of Property, Plant and Equipment by adding all Property, Plant and Equipment

Total of Property, Plant and Equipment=Property, Plant and Equipment+Investments and other assets=$42,000+$35,700=$77,700 Compute Total Assets by adding the current assets and property, plant and equipment. Total Assets=Total Current Assets+Total of Property, Plant and Equipment=$157,600+$77,700=$235,300

Compute Total Liabilities by adding total current liabilities to total long-term liabilities

(b)

To determine

To calculate: The owner’s equity and comparative balance sheet with horizontal analysis of victoria lane sporting goods for 2015 and 2016 where current assets are of $175,300, property, plant and equipment are of$43,600, investments and other assets are of $39,200, current liabilities are of$27,700 and long term liabilities are of \$51,000 for 2016

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