Question

Exercise 18-3 The comparative condensed balance sheets of Gurley Corporation are presented below. GURLEY CORPORATION Comparative Condensed Balance Sheets December 31 2017 2016 Assets Current assets $73,000 $ 81,000 97,000 88,200 Property, plant, and equipment (net) 40,200 $209,400 Intangibles 25,200 Total assets $195,200 Liabilities and stockholders' equity $46,000 Current liabilities $ 43,000 136,000 149,400 Long term liabilities Stockholders' equity 16,200 14,000 $195.200 $209,400 Total liabilities and stockholders' equity (a) Prepare a horizontal analvsis of the balance sheet data for Gurley Corporation using 2016 as a base. (Enter negative anounts and nercentages using either a neoative sion

Answer 1

Answer:

a) Horizontal analysis of balance sheet data is as prepared below:

Gurley Corporation
Condensed balance Sheet
			Increase or (Decrease)
Particulars	2017	2016	Amount	Percentage
				Change from 2016
	A	B	C	C/B
Assets			A-B
Current assets	73,000	81,000	-8,000	-9.9%
Property , plant and equipment (net)	97,000	88,200	8,800	9.9%
Intangibles	25,200	40,200	-15,000	-37.3%
Total assets	195,200	209,400	-14,200	-6.8%
Liabilities and stockholders equity
Current liabilities	43,000	46,000	-3,000	-6.5%
Long term liabilities	136,000	149,400	-13,400	-8.9%
Stockholders's equity	16,200	14,000	2,200	15.7%
Total liabilities and stockholders equity	195,200	209,400	-14,200	-6.8%

b)

Vertical analysis of the balance sheet data is as shown below:

Gurley Corporation
Condensed balance Sheet
	Amount	Percent
Particulars	2017
Assets
Current assets	73,000	37.4%
Property , plant and equipment (net)	97,000	49.7%
Intangibles	25,200	12.9%
Total assets	195,200	100%
Liabilities and stockholders equity
Current liabilities	43,000	22%
Long term liabilities	136,000	69.7%
Stockholders's equity	16,200	8.3%
Total liabilities and stockholders equity	195,200	100%