Question

HEIR JORDAN CORPORATION Income Statement Sales $48,800 34,800 Costs $14,000 3,080 Taxable income Taxes (22%) $10,920 Net income $4,200 Dividends Addition to retained earnings 6,720 The balance sheet for the Heir Jordan Corporation follows. Based on this Information and the Income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not (Leave no cells blank be certain to enter "O" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places,, e.q.. 32.16.) HEIR JORDAN CORPORATION Balance Sheet Percentage of Sales Percentag of Sales Assets Liabilities and Owners' Equity Current assets Current liabilities Cash 2,650 Accounts payable 2,400 Accounts receivable 3,600 Notes payable 5,300 Inventory 9,000 Total 15 250 Total 7,700 Long-term debt 24,000 Fixed assets Owners equity Net plant and equipment S 38.400 Common stock and paid-in surplus 18,000 Retained earnings 3,950 Total 21,950 53,650 Total assets 53 650 Total liabilities and owners equity

Answer 1

HEIR JORDAN CORPORATION
Balance sheet
		Percentage of sales			Percentage of sales
Assets			Liabilities and Owners' equity
Current assets			Current liabilities
Cash	$2,650	5.43%	Accounts payable	$2,400	4.92%
Accounts receivable	$3,600	7.38%	Notes payable	$5,300	0
Inventory	$9,000	18.44%
Total	$15,250	31.25%	Total	$7,700	0
			Long-term debt	$24,000	0
Fixed assets			Owners equity
Net plant and     equipment	$38,400	78.69%	Common stock and paid-in surplus	$18,000	0
			Retained earnings	$3,950	0
			Total	$21,950	0
Total assets	$53,650	109.94%	Liabilities and Owners' equity	$53,650	0

Explanation:

Vertical analysis formula = Individual item /total sales x 100

Cash:

($2,650/$ 48,800) x 100 = 0.054303279 x 100 = 5.43 %

Accounts receivable:

($3,600/$ 48,800) x 100 = 0.073770492 x 100 = 7.38 %

Inventory:

($9,000/$ 48,800) x 100 = 0.18442623 x 100 = 18.44 %

Total Current assets:

($15,250 /$ 48,800) x 100 = 0.3125x 100 = 31.25 %

Net plant and equipment:

($38,400 /$ 48,800) x 100 = 0.786885246 x 100 = 78.69 %

Total assets:

($53,650 /$ 48,800) x 100= 1.099385246 x 100 = 109.94 %

Accounts payable:

($2,400 /$ 48,800) x 100 = 0.049180328 x 100 = 4.92 %