The comparative balance sheet of Drango Company appears below: HUERTO COMPANY Co
ID: 2443437 • Letter: T
Question
The comparative balance sheet of Drango Company appears below:HUERTO COMPANY
Comparative Balance Sheet
December 31, 2007
Assets
2007 2006
Current assets
$ 340 $280
Plant assets
675 520
Total assets
$1,015 $800
Liabilities and stockholders' equity
Current liabilities
$ 180 $120
Long-term debt
250 160
Common stock
325 320
Retained earnings
260 200
Total liabilities and stockholders' equity
$1,015 $800
Instructions
(a) Using horizontal analysis, show the percentage change for each balance sheet item using 2006 as a base year.
(b) Using vertical analysis, prepare a common size comparative balance sheet.
Explanation / Answer
Huerto Company Comparative Balance sheet Dec 31,2007 Dec 31,2007 Dec 31,2006 Dec 31,2006 Amount Percent(%) Amount Percent(%) Percentage Change(%) Ans (b) Ans (b) Ans (b) Ans (b) Ans(a) Assets Current Assets $ 340.00 33 $ 280.00 35 21 Plant Assets $ 675.00 67 $ 520.00 65 30 Total Assets $ 1,015.00 100 $ 800.00 100 27 Liabilities & Stockholder's Equity Current Liability $ 180.00 18 $ 120.00 15 50 Long Term debt $ 250.00 25 $ 160.00 20 56 Common Stock $ 325.00 32 $ 320.00 40 2 Retained Earnings $ 260.00 26 $ 200.00 25 30 Total Liabilities & Stockholder's Equity $ 1,015.00 100 $ 800.00 100 27