Analysis 123. The balance sheet data of Randolph Company for two recent years ap

Question

Analysis 123. The balance sheet data of Randolph Company for two recent years appears below: Year Year 1 Assets Current assets Plant assets Total assets $ 440 $280 S1115 Liabilities and stockholders' equity Current liabilities Long-term debt Common stock 280 $12 325 earnings Total liabilities and stockholders' equity a. Using horizontal analysis, show the percentage change for each balance sheet item using Year 1 as a base year. b. Using vertical analysis, prepare a comparative balance sheet Round percentages to one decimal place

Explanation / Answer

a Increase(decrease) Year 2 Year 1 Amount Percent Current assets 440 280 160 57.1% Plant assets 675 520 155 29.8% Total assets 1115 800 315 39.4% Liabilities and stockholders' equity: Current liabilities 280 120 160 133.3% Long-term debt 250 160 90 56.3% Common stock 325 320 5 1.6% Retained earnings 260 200 60 30.0% Total liabilities and stockholders' equity 1115 800 315 39.4% b Year 2 Year 1 Percentage of total Percentage of total Current assets 39.5% 35.0% Plant assets 60.5% 65.0% Total assets 100.0% 100.0% Liabilities and stockholders' equity: Current liabilities 25.1% 15.0% Long-term debt 22.4% 20.0% Common stock 29.1% 40.0% Retained earnings 23.3% 25.0% Total liabilities and stockholders' equity 100.0% 100.0%

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