rowley Building Supply sells various building materials to retail outlets. The c
ID: 2592272 • Letter: R
Question
rowley Building Supply sells various building materials to retail outlets. The company has just approached essing short-term obligations. The company's financial statements for the most recent two years follow Crowley Building Supply ycamore Comparative Balance Sheets This Year Last Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses 55,000 140,000 18,000 473,000 947,000 18,000 285,000 587,000 25,000 Total current assets 1,493,000 1,638,620 1,055,000 1,543,580 Plant and equipment, net Total assets $ 3,131,620 2,598,580 Liabilities and Stockholders' Equity Liabilities: s 803,000 442,000 Current liabilities Bonds payable, 8% 615,000 615,000 Total liabilities 1,418,000 1,057,000 Stockholders' equity Preferred stock, $25 par, 7% Common stock, $10 par Retained earnings 315,000 507,000 891,620 315,000 507,000 719,580 Total stockholders' equity 1,713,620 1,541,580 Total liabilities and stockholders' Equity $ 3,131,620 2,598,580 Crowley Building Supply Comparative Income Statement and Reconciliatiorn Last Year $ 4,357,000 This Year Sales 5,015,000Explanation / Answer
2a: Commmon size balance sheet:
Explanation: The base is taken as total assets for each year. Thus % of cash this year = amount of cash/total assets*100 = 55000/3131620*100 = 1.8%. For last year the base is last year's total assets and all percentages are computed using this as base.
b. INCOME STATEMENT:
Explanation: Here sales is taken as base. Thus for this year cost of goods sold % = 3866000/5015000*100 = 77.1%.
Similarly for last year the base will be 4357000.
This year Last year Assets Current assets: Cash 1.8 % 5.4 % Marketable securities 0.0 % 0.7 % Accounts receivable 15.1 % 11.0 % Inventory 30.2 % 22.6 % Prepaid expenses 0.6 % 1.0 % Total current assets 47.7 % 40.6 % Plant and equipment, net 52.3 % 59.4 % Total assets 100.0 % 100.0 % Liabilities and stockholder's equity Liabilities: Current liabilities 25.6 % 17.0 % Bonds payable 19.6 % 23.7 % Total liabilities 45.3 % 40.7 % Stockholder's equity: Preferred stock 10.1 % 12.1 % Common stock 16.2 % 19.5 % Retaind earnings 28.5 % 27.7 % Total stockholder's equity 54.7 % 59.3 % Total liabilities and equity 100.0 % 100.0 %Related Questions
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