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271n a common size balance sheet, the 100% figure is: a. total property, plant a

ID: 2332134 • Letter: 2

Question

271n a common size balance sheet, the 100% figure is: a. total property, plant and equipment b. total current assets. c. total liabilities. d. total assets. 28. In a common size income statement, the 100% figure is: a. net cost of goods sold b. net income c. gross profit. d. net sales. 29.Assume the following sales data for a company 2015 2014 $1,287,000 780,000 What is the percentage increase in sales from 2014 to 2015? a.100% b. 6596 , 165% d. 60. 196 30.In performing a vertical analysis, the base for cost of goods sold is a. total selling expenses. b. net sales. c. total expenses. d gross profit. 31. The ability of a business to pay its debts as they come due and to eam a reasonable amount of income is referred to as a. solvency and leverage b. solvency and profitability c. solvency and liquidity d. solvency and equity

Explanation / Answer

Answer to 27 is D.

In a common size balance sheet, the 100% figure is total assets.

Answer to 28 is D.

In a common size income statement, the 100% figure is net sales.

Answer to 29 is B.

Percentage Increase = (Sales 2015 - Sales 2014) / Sales 2014
Percentage Increase = ($1,287,000 - $780,000) / $780,000
Percentage Increase = 65%

Answer to 30 is B.

In performing a vertical analysis, the base for cost of goods sold is net sales.

Answer to 31 is B.

The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as solvency and profitability.

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