Comparative Balance Sheet Questions - Weebly



Comparative Balance Sheet Questions

✓ Answer each of the following questions in an excel spreadsheet

✓ All answers should be in one spreadsheet

✓ Name each of the worksheets

✓ Save the file as Comparative Balance Sheet Questions in your accounting folder

1. You are a business consultant. A person has come to you and asked you to convert the balance sheet below to common-size form in order for them to make financial decisions.

|Balance Sheets |

|December 31, 20-- |

| |Neon Company |Radon Company |

|Assets | | |

| Bank |$3,000 |$14,500 |

| Accounts Receivable |10,000 |5,500 |

| Plant and Equipment |132,000 |53,000 |

| Automobiles |38,000 |26,000 |

|Total Assets |$183,000 |$99,000 |

| | | |

|Liabilities and Equity | | |

| Accounts Payable |$19,000 |$2,200 |

| Mortgage Payable |92,500 |18,000 |

| Capital |71,500 |78,800 |

|Total Liabilities and Equity |$183,000 |$99,000 |

2. A business man has come to you, a financial advisor for your help. He is hoping to purchase one of the companies below. Help him make his decision by converting the given balance sheets to common-size form and giving him an opinion (4-5 points) on which company he should purchase.

|Balance Sheets |

|July 31, 20-- |

| |Leo Company |Capricorn Company |

|Assets | | |

| Bank |$1,000 |$31,000 |

| Accounts Receivable |25,000 | |

| Plant and Equipment |150,000 |160,000 |

| Automobiles |50,000 |29,000 |

|Total Assets |$226,000 |$220,000 |

| | | |

|Liabilities and Equity | | |

| Accounts Payable |$25,000 |$11,000 |

| Loan Payable |20,000 |20,000 |

| Mortgage Payable | |150,000 |

| Capital |181,000 |39,000 |

|Total Liabilities and Equity |$226,000 |$220,000 |

3. Given below is the balance sheet for Playfair Company. They have asked you to convert the balance sheet to comparative form and make some suggestions (4-5 points) on how the company could improve.

|Playfair Company |

|Balance Sheet |

|December 31, 20-- and 20-- |

| | | |

| |Year 2 |Year 1 |

|Assets | | |

| Bank |$9,090 |$5,500 |

| Accounts Receivable |62220 |35700 |

| Supplies |70636 |45600 |

| Land |50000 |50000 |

| Buildings |135000 |138000 |

| Equipment |141000 |160000 |

| Automobiles |25000 |30000 |

|Total Assets |$492,946 |$464,800 |

| | | |

|Liabilities | | |

| Accounts Payable |$97,936 |$52,750 |

| Bank Loan |50000 |50000 |

| Mortgage Payable |70000 |75000 |

|Total Liabilities |$217,936 |$177,750 |

| | | |

|Owner's Equity | | |

| T. Jennings, Capital |$275,010 |$287,050 |

| | | |

|Total Liabilities and Equity |$492,946 |$464,800 |

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