Question

present the balance sheet in common size format. Please show work :)

JOULU TUUUV. Last Year 0 Sabin Electronics Comparative Balance Sheet This Year Assets Current assets: Cash $ 70,000 Marketable securities Accounts receivable, net 480,000 Inventory .... 950,000 Prepaid expenses ......... 20,000 Total current assets ..... 1,520,000 Plant and equipment, net ..... 1,480,000 Total assets $3,000,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 800,000 Bonds payable, 12% .... 600,000 Total liabilities 1,400,000 Stockholders' equity: Common stock, $15 par ............... 750,000 Retained earnings 850,000 Total stockholders' equity ........ 1,600,000 $3,000,000 Total liabilities and stockholders' equity ... $ 150,000 18,000 300,000 600,000 22,000 1,090,000 1,370,000 $2,460,000 $ 430,000 600,000 1,030,000 750,000 680,000 1,430,000 $2,460,000

Answer 1

Solution:

Please find the attached screenshot of the excel sheet containing the Common size balance sheets for this Year and Last year

Also find attached the screenshot of the excel sheet containing the formulas used for the calculation of the same.

Preparation of common size balance sheet:

The common size balance sheet is prepared by expressing the balance sheet items as a fraction of total assets.

It involves converting each balance item into a ratio expressed as a percentage of total assets.

For example : As per the Information given in the question

For This Year

Cash = $ 70,000

Total Assets = $ 3,000,000

Thus the common size ratio for cash for This Year is = $ 70,000 / $ 3,000,000 = 2.33 %

For That Year

Cash = $ 150,000

Total Assets = $ 2,460,000

Thus the common size ratio for cash for That year is = $ 150,000 / $ 2,460,000 = 6.10 %

Similarly the values for the other balance sheet items can be obtained using the above process.

21.01.2020 - Microsoft Excel XES FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW F G H 2 Sabin Electronics Assets This Year Last Year Common Size Balance Sheet This Year Common Size Balance Sheet Last Year $ 70,000 $ S Assets Current Assets: Cash Marketable Securities Accounts Receivable, net Inventory Prepaid Expenses Total Current Assets Plant and Equipment, net Total Assets $ $ $ $ $ $ $ $ 480,000 950,000 20,000 1,520,000 1,480,000 3,000,000 150,000 18,000 300,000 600,000 22,000 1,090,000 1,370,000 2,460,000 2.33% 0.00% 16.00% 31.67% 0.67% 50.67% 49.33% 100.00% 6.10% 0.73% 12.20% 24.39% 0.89% 44.31% 55.69% 100.00% $ $ $ $ Liabilities and Stockholders' Equity Liabilities: Current Liabilities Bonds Payable, 12 % Total liabilities $ $ 800,000 600,000 1,400,000 $ $ $ 430,000 600,000 1,030,000 26.67% 20.00% 46.67% 17.48% 24.39% 41.87% Stockholders' equity Common stock, $ 15 par Retained Earnings Total Stockholders' equity Total liabilities and Stockholders' equity $ $ $ $ 750,000 850,000 1,600,000 3,000,000 $ $ $ $ 750,000 680,000 1,430,000 2,460,000 25.00% 28.33% 53.33% 100.00% 30.49% 27.64% 58.13% 100.00%

21.01.2020 - Microsoft Excel XH S FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sabin Electronics Assets This Year Last Year Common Size Balance Sheet This Year | Common Size Balance Sheet Last Year =70000 Assets Current Assets : Cash Marketable Securities Accounts Receivable, net Inventory Prepaid Expenses Total Current Assets Plant and Equipment, net Total Assets =480000 =950000 =20000 =SUM(C6:010) =1480000 =C11+C12 = 150000 =18000 =300000 =600000 =22000 =SUM(D6:010) =1370000 =D11 D12 =C6/$C$13 =C7/$C$13 =C8/$C$13 =C9/$C$13 =C10/$C$13 =C11/$C$13 =C12/$C$13 =C13/$C$13 =D6/$D$13 =D7/$D$13 =D8/$D$13 =D9/$D$13 =D10/$D$13 =D11/$D$13 =D12/$D$13 =D13/$D$13 Liabilities and Stockholders' Equity Liabilities: Current Liabilities Bonds Payable, 12 % Total liabilities =800000 =600000 =C17+C18 =430000 =600000 =D17+D18 =C17/$C$25 =C18/$C$25 =C19/$C$25 =D17/$D$25 =D18/$D$25 =D19/$D$25 Stockholders' equity Common stock, $ 15 par Retained Earnings Total Stockholders' equity Total liabilities and Stockholders' equity =750000 =850000 =C22+C23 =C19+C24 =750000 =680000 =D22+D23 =D19+D24 =C22/$C$25 =C23/$C$25 =C24/$C$25 =C25/$C$25 =D22/$D$25 =D23/$D$25 =D24/$D$25 =D25/$D$25