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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Vertical analysis of balance sheet
Balance sheet data for a company for the years ended December 31, 20Y2 and 20Y1. are shown below.


Prepare a comparative balance sheet for 20Y2 and 20YI, staling each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. Round to one decimal place.

To determine

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement, the common size format shows all the amounts as a % of sales revenue and for the Balance sheet, the common size format shows the each items of the balance sheet as a % of the Total assets amount.

To Prepare:

The Comparative Common Size Balance Sheet.

Explanation

The Comparative Common Size Balance Sheet is prepared as follows:

    Comparative Balance Sheet
    20Y220Y1
    $ Common Size %$ Common Size %
    A B = A / Total AssetsC D = C / Total Assets
    Current Assets $ 1,500,000 9.4% $ 1,200,000 8.6%
    Property, Plant and Equipment $ 12,500,000 78.1% $ 10,800,000 77.1%
    Intangible assets $ 2,000,000 12...

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