Managerial Accounting
Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Chapter 13, Problem 6E
To determine

Common size balance sheet:

Common size balance sheet is a method of presenting balance sheet in terms of percentage where every account is revealed in form of percentage.

To prepare: Common size balance sheet of S Company.

Expert Solution & Answer
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Explanation of Solution

Common size balance sheet is expressed in form of percentage which helps to analyze the statement in a better way.

Below mentioned is the balance sheet of S Company.

    S COMPANY

    Common Size Balance Sheet

    For the Year Ended December31, 2017, 2016 and 2015

    Common size percents

    Particulars

    2017($)

    2016($)

    2015($)

    2017

    2016

    2015

    Assets

    Cash

    31,800

    35,625

    37,800

    6.08

    18.01

    10.01

    Accounts receivable

    89,500

    62,500

    50,200

    17.11

    14.04

    13.3

    Merchandise inventory

    112,500

    82,500

    54,000

    21.51

    18.54

    14.30

    Prepaid expenses

    10,700

    9,375

    5,000

    2.04

    2.1

    1.32

    Plant assets, net

    278,500

    255,000

    230,500

    53.25

    57.30

    61.06

    Total assets

    523,000

    445,000

    377,500

    100

    100

    100

    Liabilities and Equity

    Accounts payable

    129,900

    75,250

    51,250

    24.84

    16.91

    13.58

    Long-term notes payable secured by mortgage on plant assets

    98,500

    101,500

    83.500

    18.83

    22.81

    22.12

    Common stock

    163,500

    163,500

    163,500

    31.26

    36.74

    43.31

    Retained earnings

    131,100

    104,750

    79,250

    25.07

    23.54

    21

    Total liabilities and equity

    523,000

    445,000

    377,500

    100

    100

    100

    Table (1)
  • S Company has maintained suitable amount of cash in the year 2017 as compared to other years. Common size percents of cash are 6.08%, 18.01% and 10.01% in the year 2017, 2016, and 2015.
  • Whereas accounts payable of the company has been increased in the year of 2017 to 24.84% as compared to 2016 and 2015.

Hence, S Company tries to work efficiently.

Working Notes:

Formula to calculate common size percent is,

    Commonsizepercent(%)= Analysis Baseamount ×100

2017

Calculation of common percent of cash,

    Common percent of cash= $31,800 $523,000 ×100 =6.08%

Calculation of common percent of accounts receivables,

    Common percent accountsreceivables= $89,500 $523,000 ×100 =17.11%

Calculation of common percent of merchandise inventory,

    Common percent ofmerchandise inventory= $112,500 $523,000 ×100 =21.51%

Calculation of common percent of prepaid expenses,

    Common percent ofprepaidexpenses= $10,700 $523,000 ×100 =2.04%

Calculation of common percent of plant assets,

    Common percent plantassets= $278,500 $523,000 ×100 =53.25%

Calculation of common percent of total assets,

    Common percent oftotalassets= $523,000 $523,000 ×100 =100%

Calculation of common percent of accounts payable,

    Common percent ofaccounts payable= $129,900 $523,000 ×100 =24.84%

Calculation of common percent of long term notes payable,

    Common percent of longterm notes payable= $98,500 $523,000 ×100 =18.83%

2016

Calculation of common percent of cash,

    Common percent of cash= $35,625 $445,000 ×100 =8.01%

Calculation of common percent of accounts receivables,

    Common percent accountsreceivables= $62,500 $445,000 ×100 =14.04%

Calculation of common percent of merchandise inventory,

    Common percent ofmerchandise inventory= $82,500 $445,000 ×100 =18.54%

Calculation of common percent of prepaid expenses,

    Common percent ofprepaidexpenses= $9,375 $445,000 ×100 =2.1%

Calculation of common percent of plant assets,

    Common percent plantassets= $255,000 $445,000 ×100 =57.30%

Calculation of common percent of total assets,

    Common percent oftotalassets= $445,000 $445,000 ×100 =100%

Calculation of common percent of accounts payable,

    Common percent ofaccounts payable= $75,250 $445,000 ×100 =16.91%

Calculation of common percent of long term notes payable,

    Common percent of long term notes payable secured= $101,500 $445,000 ×100 =22.81%

Calculation of common percent of common stock,

    Common percent ofcommonstock= $163,500 $445,000 ×100 =36.74%

Calculation of common percent of retained earnings,

    Common percent ofretainedearnings= $104,750 $445,000 ×100 =23.54%

Calculation of common percent of total liabilities and equity,

    Common percent oftotalliabilitiesandequity= $445,000 $445,000 ×100 =100%

2015

Calculation of common percent of cash,

    Common percent of cash= $37,800 $377,500 ×100 =10.01%

Calculation of common percent of accounts receivables,

    Common percent accountsreceivables= $50,200 $377,500 ×100 =13.3%

Calculation of common percent of merchandise inventory,

    Common percent ofmerchandise inventory= $54,000 $377,500 ×100 =14.30%

Calculation of common percent of prepaid expenses,

    Common percent ofprepaidexpenses= $5,000 $377,500 ×100 =1.32%

Calculation of common percent of plant assets,

    Common percent plantassets= $230,500 $377,500 ×100 =61.06%

Calculation of common percent of total assets,

    Common percent oftotalassets= $377,500 $377,500 ×100 =100%

Calculation of common percent of accounts payable,

    Common percent ofaccounts payable= $51,250 $377,500 ×100 =13.58%

Calculation of common percent of long term notes payable,

    Common percent of long term notes payable secured= $83,500 $377,500 ×100 =22.12%

Calculation of common percent of common stock,

    Common percent ofcommonstock= $163,500 $377,500 ×100 =43.31%

Calculation of common percent of retained earnings,

    Common percent ofretainedearnings= $79,250 $377,500 ×100 =21%

Calculation of common percent of total liabilities and equity,

    Common percent of totalliabilitiesandequity= $377,500 $377,500 ×100 =100%

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Chapter 13 Solutions

Managerial Accounting

Ch. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Where on the income statement does a company...Ch. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Samsung Refer to Samsung’s financial statements in...Ch. 13 - Prob. 17DQCh. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Prob. 9QSCh. 13 - Prob. 10QSCh. 13 - Prob. 11QSCh. 13 - Prob. 12QSCh. 13 - Prob. 13QSCh. 13 - Morgan Company and Parker Company are similar...Ch. 13 - Which of the following gains or losses would...Ch. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Exercise 13-6 Common-size percents P2 Simon...Ch. 13 - Prob. 7ECh. 13 - Exercise 13-8 Liquidity analysis and...Ch. 13 - Exercise 13-9 Risk and Capital structure analysis...Ch. 13 - Exercise 13-10 Efficiency and Profitability...Ch. 13 - Exercise 13-11 profitability analysis P3 Refer to...Ch. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Exercise Interpreting financial ratios Refer to...Ch. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Problem 13-4A Calculation of financial statement...Ch. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Prob. 1PSBCh. 13 - Prob. 2PSBCh. 13 - Prob. 3PSBCh. 13 - Prob. 4PSBCh. 13 - Prob. 5PSBCh. 13 - Problem 13-6BAIncome statement computations and...Ch. 13 - Use the following selected data from Business...Ch. 13 - Use Apple’s financial statements in Appendix A to...Ch. 13 - Prob. 2AACh. 13 - Prob. 3AACh. 13 - Prob. 1BTNCh. 13 - Prob. 2BTNCh. 13 - Prob. 3BTNCh. 13 - Prob. 4BTNCh. 13 - ENTREPRENEURIAL DECISION A1 P1 P2 P3 BTN 13-7...Ch. 13 - Prob. 6BTN
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