Convert these comparative balance sheets to common size statements. Using the common size statements, explain where the greatest changes occurred.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ithaca, Inc.
Comparative Balance Sheets
2016 and 2017
2017
2016
Cash
320,000
330,000
Accounts receivable
450,000 400,000
Inventory
400,000 550,000
Property, plant and equipment
1,300,000 1,300,000
Less: Accumulated depreciation
625,000 575,000
Total assets
1,845,000 2,005,000
Accounts payable
360,000 355,000
Long-term notes payable
380,000 450,000
Common stock
500,000
500,000
Retained earnings
605,000
700,000
Total liabilities and equity
1,845,000
2,005,000
Convert these comparative balance sheets to common size statements. Using
the common size statements, explain where the greatest changes occurred.
Transcribed Image Text:Ithaca, Inc. Comparative Balance Sheets 2016 and 2017 2017 2016 Cash 320,000 330,000 Accounts receivable 450,000 400,000 Inventory 400,000 550,000 Property, plant and equipment 1,300,000 1,300,000 Less: Accumulated depreciation 625,000 575,000 Total assets 1,845,000 2,005,000 Accounts payable 360,000 355,000 Long-term notes payable 380,000 450,000 Common stock 500,000 500,000 Retained earnings 605,000 700,000 Total liabilities and equity 1,845,000 2,005,000 Convert these comparative balance sheets to common size statements. Using the common size statements, explain where the greatest changes occurred.
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