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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

Complete the following comparative balance sheet with horizontal analysis for Calypso Industries, Inc.

Calypso Industries, Inc. Comparative Balance Sheet December 31, 2015 and 2016

Assets 2016 2015 Increase (Decrease) Amount Percent
Current Assets Cash Accounts Receivable Notes Receivable SuppliesTotal Current Assets $ 8,700 23,110 2,900 4,540 $ 5,430 18,450 3,400 3,980 _____ ______
Property, Plant, and Equipment Land Buildings Machinery and Equipment Total Property. Plant and Equipment 34,00076,30054,700 34,00079,80048,900 _____ _____
Investments and Other Assets Total Assets 54,230 49,810 ______ _____
Liabilities and Stockholders' Equity
Current Liabilities Accounts Payable Salaries PayableTotal Current Liabilities S 15,330 7,680 $ 19,650 7,190 _____ ___
Long-Term Liabilities Mortgage Payable Note Payable (3-year)Total Long-Term Liabilities 53,01032,400 54,20033,560
Total Liabilities
Liabilities and Stockholders' Equity 2016 2015
Stockholders' Equity Common Stock Retained EarningsTotal Liabilities and Stockholders’ Equity $130,060 20,000 $120,1709,000 _____ ______

To determine

The complete balance sheet of provided comparative balance sheet of Calypso Industries, Inc. for December 31,2015 and 2016 with horizontal analysis.

Explanation

Given Information:

The comparative balance sheet of Calypso Industries, Inc. for December 31,2015 is:

Formula used:

Follow these steps to prepare a horizontal analysis of a balance sheet:

Step 1: Prepare a comparative balance sheet with the current period listed first and the previous period listed next.

Step 2: Name the next two columns as:

Increase(Decrease)Amount     Percent

Step 3: Compute the dollar difference between the current and previous periods and note in the amount column. Enter all decreases in the parentheses.

Step 4: Compute the percent change using the percentage formula:

Percent change(rate)=Amount of change, Step3(portion)Previous period amount(base)

Step 5: Note the percent change in the percent column. Again, enter all decreases in the parentheses.

Compute the amount increase or decrease by subtracting current period amount from the previous period amount.

2016amount2015amount=8,7005,430=$3,270

All other increase and decrease will be computed in the same way.

Calculation for the year 2016:

Compute total current assets by substituting cash, accounts receivables, notes receivables and supplies:

Total Current Assets=Cash +Accounts receivables+Notes Receivables+Supplies=8,700+23,110+2,900+4,540=$39,250

Compute total of Property, Plant and Equipment by substituting land, buildings and machinery and equipment:

Total of Property, Plant and Equipment=Land+Building+Machinery and Equipment=34,000+76,300+54,700=$165,000

Compute Total Assets by substituting total current assets, total property plant and equipment and investments:

Total Assets=Total Current Assets+Total of Property, Plant and Equipment+Invetments and other Assets=39,250+165,000+54,230=$258,480

Compute Total Current Liabilities by substituting accounts payable and salaries payable:

Total Current Liabilities=Accounts payable+Salaries payable=15,330+7,680=$23,010

Compute Total Liabilities by substituting total current liabilities and total long-term liabilities:

Total Liabilities=Total Current Liabilities+Total long-term liabilities=26,500+67,000=$93,500

Compute Total Liabilities and Stockholder’s Equity by substituting total liabilities, common stock and retained earnings:

Total Liabilities and Stockholder’s Equity=Total Liabilities+Common stock+Retained Earnings=108,420+130,060+20,000=$258,480

Calculation for the year 2015:

Compute total current assets by substituting cash, accounts receivables, notes receivables and supplies:

Total Current Assets=Cash +Accounts receivables+Notes Receivables+Supplies=5,430+18,450+3,400+3,980=$31,260

Compute total of Property, Plant and Equipment by substituting land, buildings and machinery and equipment:

Total of Property, Plant and Equipment=Land+Building+Machinery and Equipment=34,000+79,800+48,900=$162,700

Compute Total Assets by substituting total current assets, total property plant and equipment and investments:

Total Assets=Total Current Assets+Total of Property, Plant and Equipment+Invetments and other Assets=$31,260+162,700+49,810=$243,770

Compute Total Current Liabilities by substituting accounts payable and salaries payable:

Total Current Liabilities=Accounts payable+Salaries payable=19,650+7,190=26,840

Compute Total Liabilities by substituting total current liabilities and total long-term liabilities:

Total Liabilities=Total Current Liabilities+Total long-term liabilities=26,840+87,760=$114,600

Compute Total Liabilities and Stockholder’s Equity by substituting total liabilities, common stock and retained earnings:

Total Liabilities and Stockholder’s Equity=Total Liabilities+Common stock+Retained Earnings=114,600+120,170+9,000=$243,770

The required balance sheet is,

Calypso Industries, Inc

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