ch24_sol

InstructionsInstructions for the Microsoft Excel Templates by Rex A SchildhouseBe advised, the template workbooks and worksheets are not protected.Overtyping any data may remove it.

Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text.You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires more than one page.Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly of multiple pages.

If more than one page is required by the template, manual page breaks have been set to provide consistent presentation.All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells.

In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriate to the entry, or text answers to questions.

And information or data which may be required by the solution will be entered in cells with borders to help identify them.Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in the format set in the template.

Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously entered.

Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title without typing it.

Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable.

Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of the formatting found in the templates to meet your desires.

Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel.

Where a yellow highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed over.

Where a yellow highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in General Journal number six."

The print area is defined to fit onto 8 1/2" 11" sheets in portrait or landscape mode as required. Margins are generally set to no less than 1/2" so most printers can print them without a problem. If you printer cannot accept margins less than 1" you may have to reformat the margins through Page Setup.

The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the View menu and selecting "Unfreeze Panes" under "Freeze Panes."

When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400. Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative value if both cells E10 and E11 contain positive values.

Microsoft Office and Microsoft Excel are products of, and copyrighted by,Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399

Exercise 24-2 Solution

Name:SolutionDate:Instructor:Course:Intermediate Accounting, 14th Edition by Kieso, Weygandt, and WarfieldPrimer on Using Excel in Accounting by Rex A Schildhouse

E24-2 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.

2. Introduction of a new product line.3. Loss of assembly plant due to fire.4. Sale of a significant portion of the company's assets.5. Retirement of the company president.6. Issuance of a significant number of shares of common stock.7. Loss of a significant customer.8. Prolonged employee strike.9. Material loss on a year-end receivable because of customer's bankruptcy.10. Hiring of a new president.11. Settlement of prior year's litigation against the company.12. Merger with another company of comparable size.

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Exercise 24-2

Name:Date:Instructor:Course:Intermediate Accounting, 14th Edition by Kieso, Weygandt, and WarfieldPrimer on Using Excel in Accounting by Rex A Schildhouse

E24-2 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.

2. Introduction of a new product line.3. Loss of assembly plant due to fire.4. Sale of a significant portion of the company's assets.5. Retirement of the company president.6. Issuance of a significant number of shares of common stock.7. Loss of a significant customer.8. Prolonged employee strike.9. Material loss on a year-end receivable because of customer's bankruptcy.10. Hiring of a new president.11. Settlement of prior year's litigation against the company.12. Merger with another company of comparable size.

1Enter letter7Enter letter2Enter letter8Enter letter3Enter letter9Enter letter4Enter letter10Enter letter5Enter letter11Enter letter6Enter letter12Enter letter


Exercise 24-3 Solution


E24-3 (Segmented Reporting) LaGreca Company is involved in four separate industries. The following information is available for each of the four industries.

Operating SegmentTotal RevenueOperating Profit (Loss)Identifiable AssetsW$60,000$15,000$167,000X10,0001,50083,000Y23,000(2,000)21,000Z9,0001,00019,000$102,000$15,500$290,000

Instructions:Determine which of the operating segments are reportable based on the:

(a) Revenue test.Revenue test: 10% $102,000 = $10,200.Segments W ($60,000) and Y ($23,000) both meet this test.

(b) Operating profit (loss) test.Operating profit test: 10% ($15,000 + $1,500 + $1,000) = $1,750.Segments W ($15,000) and Y ($2,000 absolute amount) both meet this test.

(c) Identifiable assets test.Identifiable assets test: 10% $290,000 = $29,000.Segments W ($167,000) and X ($83,000) both meet this test.


Exercise 24-3


E24-3 (Segmented Reporting) LaGreca Company is involved in four separate industries. The following information is available for each of the four industries.

Operating SegmentTotal RevenueOperating Profit (Loss)Identifiable AssetsW$60,000$15,000$167,000X10,0001,50083,000Y23,000(2,000)21,000Z9,0001,00019,000$102,000$15,500$290,000

Instructions:Determine which of the operating segments are reportable based on the:

(a) Revenue test.Enter answer in this areaEnter answer in this area

(b) Operating profit (loss) test.Enter answer in this areaEnter answer in this area

(c) Identifiable assets test.Enter answer in this areaEnter answer in this area


Problem 24-3 Solution


P24-3 (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns15%of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, Daniel Brown approached the

Topeka National Bank, asking for a 24-month extension on two$35,000notes, which are due on June 30, 2013, and September 30, 2013. Another note of$6,000is due on March 31, 2014, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburns cash flow problems are due primarily to the companys desire to finance a$300,000plant expansion over the next 2 fiscal years through internally generated funds.

The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years.

BRADBURN CORPORATIONStatement of Financial PositionMarch 31Assets20132012Cash$18,200$12,500Notes receivable148,000132,000Accounts receivable (net)131,800125,500Inventories (at cost)105,00050,000Plant & equipment (net of depreciation)1,449,0001,420,500Total assets$1,852,000$1,740,500

Liabilities and Owners' EquityAccounts payable$79,000$91,000Notes payable76,00061,500Accrued liabilities9,0006,000Common stock (130,000 shares, $10 par)1,300,0001,300,000Retained earningsa388,000282,000Total liabilities and owners' equity$1,852,000$1,740,500aCash dividends were paid at the rate of $1.00 per share in fiscal year 2012 and $2.00 per share in fiscal year 2013.

BRADBURN CORPORATIONIncome StatementFor The Fiscal Year Ended March 3120132012Sales$3,000,000$2,700,000Cost of goods sold1,530,0001,425,000Gross margin1,470,0001,275,000Operating expenses860,000780,000Income before income taxes610,000495,000Income taxes244,000198,000Net income after income taxes$366,000$297,000Depreciation charges on the plant and equipment of$100,000and$102,500for the fiscal years ended March 31, 2012, and 2013, respectively, are included in cost of goods sold.

Instructions:Fill in the provided matrix and utilize it as the matrix for "VLOOKUP" formulas within the cells below.

Column 4Column 520132012Average inventory - 201177,500Average total assets1,796,2501,714,500Total Assets = Mar 31, 20091,688,500Total Assets = Mar 31, 20101,740,500Total Assets = Mar 31, 20111,852,000Cost of goods sold1,530,0001,425,000Current assets403,000320,000Current liabilities164,000158,500Dividends130,000130,000Depreciation102,500100,000Gross margin1,470,0001,275,000Income before taxes610,000495,000Income taxes (40%)244,000198,000Inventories = EOY 201050,000Inventories = EOY 2011105,000Net income after taxes366,000297,000Operating expenses860,000780,000Sales3,000,0002,700,000

(a) Compute the following items for Bradburn Corporation:(1) Current ratio for fiscal years 2012 and 2013.

2012 Current ratio = Current assets ----------------------- =Current liabilities$320,000---------------- =2.02to 1$158,500

2013 Current ratio = Current assets ----------------------- =Current liabilities$403,000---------------- =2.46to 1$164,000

(2) Acid-test (quick) ratio for fiscal years 2012 and 2013.

2012 Quick ratio = Current assets - Inventories ----------------------- =Current liabilities$270,000---------------- =1.70$158,500to 1

2013 Quick ratio = Current assets - Inventories ----------------------- =Current liabilities$298,000---------------- =1.82$164,000to 1

(3) Inventory turnover for fiscal year 2013.

2013 Inventory Turnover = Cost of goods sold ------------------------------------ =Average inventory$1,530,000---------------- =19.74$77,500to 1

(4) Return on assets for fiscal years 2012 and 2013. (Assume total assets were$1,688,500 at March 31, 2009.)

2012 Return on assets = Net income ----------------------- =Average total assets$297,000---------------- =17.3%$1,714,500

2013 Return on assets = Current assets ----------------------- =Current liabilities$366,000---------------- =20.4%$1,796,250

(5) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2012 to 2013. Omit "000" from the values.

20122013ChangePercent ChangeSales$3,000$2,700$30011.11%Cost of goods sold1,5301,4251057.37%Gross margin1,4701,27519515.29%Net income after taxes3662976923.23%

(b) Identify and explain what other financial reports and/or financial analyses might be helpful to the commercial loan officer of Topeka National Bank in evaluating Daniel Browns request for a time extension on Bradburns notes.

Other financial reports and financial analyses which might be helpful to the commercial loan officer of Topeka National Bank include:

1The statement of cash flows would highlight the amount of cash provided by operating activities, the other sources of cash, and the uses of cash for the acquisition of long-term assets and long-term debt requirement.

2Projected financial statements for 2014 including a projected statement of cash flows. In addition, a review of Bradburns comprehensive budgets might be useful. These items would present managements estimates of operations for the coming year.

3A closer examination of Bradburns liquidity by calculating some additional ratios, such as days sales in receivables, accounts receivable turnover, and days sales in inventory.

4An examination as to the extent that leverage is being used by Bradburn.

(c) Assume that the percentage changes experienced in fiscal year 2013 as compared with fiscal year 2012 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburns desire to finance the plant expansion from internally generated funds realistic? Discuss.

Bradburn Corporation should be able to finance the plant expansion from internally generated funds as shown in the calculations presented below.

201320142015Sales$3,000.0$3,333.3$3,703.7Cost of goods sold1,530.01,642.71,763.8Gross margin1,470.01,690.61,939.9Operating expenses860.0948.21,045.5Income before taxes610.0742.4894.5Income taxes (40%)244.0297.0357.8Net income$366.0$445.4$536.7

Add: Depreciation102.5102.5Deduct: Dividends(260.0)(260.0)Note repayment(6.0)Funds available for plant expansion281.9379.2Plant expansion(150.0)(150.0)Excess funds$131.9$229.2

Assumptions:Sales increase at a rate of [($3,000,000 - $2,700,000) / $2,700,000]11.11%Cost of goods sold increases at rate of [($1,530,000 - $1,425,000) / $1,425,000]7.37%despite depreciation remaining constant.Other operating expenses increase at the same rate experienced from 2010 to 2011; i.e., at[($860,000 - $780,000) / $780,000)10.26%Depreciation remains constant at$102,500Dividends remain at $2.00per share.Plant expansion is financed equally over the two years($150,000 each year).Loan extension is granted.

(d) Should Topeka National Bank grant the extension on Bradburns notes considering Daniel Browns statement about financing the plant expansion through internally generated funds? Discuss.

Topeka National Bank should probably grant the extension of the loan, if it is really required, because the projected cash flows for 2014 and 2015 indicate that an adequate amount of cash will be generated from operations to finance the plant expansion and repay the loan. In actuality, there is some question whether Bradburn needs the extension because the excess funds generated from 2014 operations might cover the $70,000 loan repayment. However, Bradburn may want the loan extension to provide a cushion because its cash balance is low. The financial ratios indicate that Bradburn has a solid financial structure. If the bank wanted some extra protection, it could require Bradburn to appropriate retained earnings for the amount of the loan and/or restrict cash dividends for the next two years to the 2013 amount of $2.00 per share.


Problem 24-3


P24-3 (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns15%of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, Daniel Brown approached the

Topeka National Bank, asking for a 24-month extension on two$35,000notes, which are due on June 30, 2013, and September 30, 2013. Another note of$6,000is due on March 31, 2014, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburns cash flow problems are due primarily to the companys desire to finance a$300,000plant expansion over the next 2 fiscal years through internally generated funds.

The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years.

BRADBURN CORPORATIONStatement of Financial PositionMarch 31Assets20132012Cash$18,200$12,500Notes receivable148,000132,000Accounts receivable (net)131,800125,500Inventories (at cost)105,00050,000Plant & equipment (net of depreciation)1,449,0001,420,500Total assets$1,852,000$1,740,500

Liabilities and Owners' EquityAccounts payable$79,000$91,000Notes payable76,00061,500Accrued liabilities9,0006,000Common stock (130,000 shares, $10 par)1,300,0001,300,000Retained earningsa388,000282,000Total liabilities and owners' equity$1,852,000$1,740,500aCash dividends were paid at the rate of $1.00 per share in fiscal year 2012 and $2.00 per share in fiscal year 2013.

SANDBURG CORPORATIONIncome StatementFor The Fiscal Year Ended March 3120132012Sales$3,000,000$2,700,000Cost of goods sold1,530,0001,425,000Gross margin1,470,0001,275,000Operating expenses860,000780,000Income before income taxes610,000495,000Income taxes244,000198,000Net income after income taxes$366,000$297,000Depreciation charges on the plant and equipment of$100,000and$102,500for the fiscal years ended March 31, 2012, and 2013, respectively, are included in cost of goods sold.

Instructions:Fill in the provided matrix and utilize it as the matrix for "VLOOKUP" formulas within the cells below.

Column 4Column 520132012Average inventory - 2011FormulaAverage total assetsFormulaFormulaTotal Assets = Mar 31, 2009FormulaTotal Assets = Mar 31, 2010FormulaTotal Assets = Mar 31, 2011AmountCost of goods soldAmountAmountCurrent assetsAmountAmountCurrent liabilitiesAmountAmountDividendsAmountAmountDepreciationAmountAmountGross marginAmountAmountIncome before taxesAmountAmountIncome taxes (40%)AmountAmountInventories = EOY 2010AmountInventories = EOY 2011AmountNet income after taxesAmountAmountOperating expensesAmountAmountSalesAmountAmount

(a) Compute the following items for Bradburn Corporation:(1) Current ratio for fiscal years 2012 and 2013.

2012 Current ratio = Current assets ----------------------- =Current liabilitiesAmount---------------- =Formulato 1Amount

2013 Current ratio = Current assets ----------------------- =Current liabilitiesFormula---------------- =Formulato 1Formula

(2) Acid-test (quick) ratio for fiscal years 2012 and 2013.

2012 Quick ratio = Current assets - Inventories ----------------------- =Current liabilitiesFormula---------------- =FormulaFormulato 1

2013 Quick ratio = Current assets - Inventories ----------------------- =Current liabilitiesFormula---------------- =FormulaFormulato 1

(3) Inventory turnover for fiscal year 2013.

2013 Inventory Turnover = Cost of goods sold ------------------------------------ =Average inventoryAmount---------------- =FormulaERROR:#N/Ato 1

(4) Return on assets for fiscal years 2012 and 2013. (Assume total assets were$1,688,500 at March 31, 2011.)

2012 Return on assets = Net income ----------------------- =Average total assetsFormula---------------- =FormulaFormula

2013 Return on assets = Current assets ----------------------- =Current liabilitiesFormula---------------- =FormulaFormula

(5) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2012 to 2013. Omit "000" from the values.

20122013ChangePercent ChangeSalesFormulaFormulaFormulaFormulaCost of goods soldFormulaFormulaFormulaFormulaGross marginFormulaFormulaFormulaFormulaNet income after taxesFormulaFormulaFormulaFormulaNote: The formulas in some cell formulas are "live" and need values placed in their source cells.(b) Identify and explain what other financial reports and/or financial analyses might be helpful to the commercial loan officer of Topeka National Bank in evaluating Daniel Browns request for a time extension on Bradburns notes.

Other financial reports and financial analyses which might be helpful to the commercial loan officer of Spokane National Bank include:

1Enter text answer as appropriate.




(c) Assume that the percentage changes experienced in fiscal year 2013 as compared with fiscal year 2012 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburns desire to finance the plant expansion from internally generated funds realistic? Discuss.

Enter text answer as appropriate.

201320142015SalesFormulaFormulaFormulaTitleFormulaFormulaFormulaGross marginFormulaFormulaFormulaTitleFormulaFormulaFormulaIncome before taxesFormulaFormulaFormulaTitleFormulaFormulaFormulaNet incomeFormulaFormulaFormula

Add: TitleAmountAmountDeduct: TitleAmountAmountNote repaymentAmountFunds available for plant expansionFormulaFormulaPlant expansionAmountAmountExcess fundsFormulaFormula

Assumptions:Sales increase at a rate ofCost of goods sold increases at rate ofdespite depreciation remaining constant.Other operating expenses increase at the same rate experienced from 2010 to 2011; i.e., at

Depreciation remains constant atDividends remain at per share.Plant expansion is financed equally over the two years( each year).Loan extension is granted.

(d) Should Topeka National Bank grant the extension on Bradburns notes considering Daniel Browns statement about financing the plant expansion through internally generated funds? Discuss.

Enter text answer here.


Problem 24-4 Solution


P 24-4 (Horizontal and Vertical Analysis) Presented below are comparative balance sheets for the Gilmour Company.

GILMOUR COMPANYComparative Balance SheetDecember 31, 2013 and 201220132012AssetsCash$180,000$275,000Accounts receivable (net)220,000155,000Short-term investments270,000150,000Inventories1,060,000980,000Prepaid expense25,00025,000Fixed assets2,585,0001,950,000Accumulated depreciation(1,000,000)(750,000)$3,340,000$2,785,000

Liabilities and Stockholders' EquityAccounts payable$50,000$75,000Accrued expenses170,000200,000Bonds payable450,000190,000Capital stock2,100,0001,770,000Retained earnings570,000550,000$3,340,000$2,785,000

Instructions: (Round to two decimal places.)(a) Prepare a comparative balance sheet of Gilmour Company showing the percent each item is of the total assets or total liabilities and stockholders' equity.

GILMOUR COMPANYComparative Balance SheetDecember 31, 2013 and 2012December 3120132012AssetsCash$180,0005.39%$275,0009.87%Accounts receivable (net)220,0006.59%155,0005.57%Short-term investments270,0008.08%150,0005.39%Inventories1,060,00031.74%980,00035.19%Prepaid expense25,0000.75%25,0000.90%Fixed assets2,585,00077.40%1,950,00070.02%Accumulated depreciation(1,000,000)-29.94%(750,000)-26.93%Total$3,340,000100.00%$2,785,000100.00%

Liabilities and Stockholders EquityAccounts payable$50,0001.50%$75,0002.69%Accrued expenses170,0005.09%200,0007.18%Bonds payable450,00013.47%190,0006.82%Capital stock2,100,00062.87%1,770,00063.55%Retained earnings570,00017.07%550,00019.75%Total$3,340,000100.00%$2,785,000100.00%

(b) Prepare a comparative balance sheet of Gilmour Company showing the dollar change and the percentage change for each item.

GILMOUR COMPANYComparative Balance SheetDecember 31, 2013 and 2012December 31Increase or (Decrease)Assets20132012$ Change% ChangeCash$180,000$275,000($95,000)-34.55%Accounts receivable (net)220,000155,00065,00041.94%Short-term investments270,000150,000120,00080.00%Inventories1,060,000980,00080,0008.16%Prepaid expense25,00025,00000.00%Fixed assets2,585,0001,950,000635,00032.56%Accumulated depreciation(1,000,000)(750,000)(250,000)33.33%Total$3,340,000$2,785,000$555,00019.93%

Liabilities and Stockholders EquityAccounts payable$50,000$75,000($25,000)-33.33%Accrued expenses170,000200,000(30,000)-15.00%Bonds payable450,000190,000260,000136.84%Capital stock2,100,0001,770,000330,00018.64%Retained earnings570,000550,00020,0003.64%Total$3,340,000$2,785,000$555,00019.93%

(c) Of what value is the additional information provided in part (a)?

The component percentage (common-size) balance sheet makes easier analysis possible. It actually reduces total assets and total liabilities and stockholders equity to a common base. Thus, the statement is simplified into figures that can be more readily grasped. It can also show relationships that might be out of line. For example, management might believe that accounts receivable of 6.59% is rather low. Perhaps the company is not granting enough credit. The increased percentage of bonds payable from 6.82% to 13.47% indicates increased leverage which may reflect negatively on the companys debt-paying ability and long-run solvency. These percentages can be compared with those of other successful firms to see how the firm stands and to see where possible improvements could be made.

(d) Of what value is the additional information provided in part (b)?

A statement such as that in part (b) is a good analysis and breakdown of the total change in assets and liabilities and stockholders equity. The statement breaks down the 19.93% increase and makes it easier for analysts to spot any unusual items. The increase is explained on the asset side by an increase in accounts receivable, short-term investments, and fixed assets and on the liability side by an increase in bonds payable and capital stock. This statement makes analysis of the years operations generally easier.


Problem 24-4


P 24-4 (Horizontal and Vertical Analysis) Presented below are comparative balance sheets for the Gilmour Company.

GILMOUR COMPANYComparative Balance SheetDecember 31, 2013 and 201220132012AssetsCash$180,000$275,000Accounts receivable (net)220,000155,000Short-term investments270,000150,000Inventories1,060,000980,000Prepaid expense25,00025,000Fixed assets2,585,0001,950,000Accumulated depreciation(1,000,000)(750,000)$3,340,000$2,785,000

Liabilities and Stockholders' EquityAccounts payable$50,000$75,000Accrued expenses170,000200,000Bonds payable450,000190,000Capital stock2,100,0001,770,000Retained earnings570,000550,000$3,340,000$2,785,000

Instructions: (Round to two decimal places.)(a) Prepare a comparative balance sheet of Gilmour Company showing the percent each item is of the total assets or total liabilities and stockholders' equity.

GILMOUR COMPANYComparative Balance SheetDecember 31, 2013 and 2012December 3120132012AssetsCashAmountFormulaAmountFormulaAccounts receivable (net)AmountFormulaAmountFormulaShort-term investmentsAmountFormulaAmountFormulaInventoriesAmountFormulaAmountFormulaPrepaid expenseAmountFormulaAmountFormulaFixed assetsAmountFormulaAmountFormulaAccumulated depreciationAmountFormulaAmountFormulaTotalFormulaFormulaFormulaFormula

Liabilities and Stockholders EquityAccounts payableAmountFormulaAmountFormulaAccrued expensesAmountFormulaAmountFormulaBonds payableAmountFormulaAmountFormulaCapital stockAmountFormulaAmountFormulaRetained earningsAmountFormulaAmountFormulaTotalFormulaFormulaFormulaFormula

(b) Prepare a comparative balance sheet of Gilmour Company showing the dollar change and the percentage change for each item.

GILMOUR COMPANYComparative Balance SheetDecember 31, 2013 and 2012December 31Increase or (Decrease)Assets20132012$ Change% ChangeCashAmountAmountFormulaFormulaAccounts receivable (net)AmountAmountFormulaFormulaShort-term investmentsAmountAmountFormulaFormulaInventoriesAmountAmountFormulaFormulaPrepaid expenseAmountAmountFormulaFormulaFixed assetsAmountAmountFormulaFormulaAccumulated depreciationAmountAmountFormulaFormulaTotalFormulaFormulaFormulaFormula

Liabilities and Stockholders EquityAccounts payableAmountAmountFormulaFormulaAccrued expensesAmountAmountFormulaFormulaBonds payableAmountAmountFormulaFormulaCapital stockAmountAmountFormulaFormulaRetained earningsAmountAmountFormulaFormulaTotalFormulaFormulaFormulaFormula

(c) Of what value is the additional information provided in part (a)?


(d) Of what value is the additional information provided in part (b)?



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