The comparative balance sheet of Drango Company appears below: HUERTO COMPANY Co
ID: 2501982 • 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
Answer no. (a) Horizontal Analysis , showing % change for each balance sheet item using 2006 as a base year
Answer no.(b) Vertical Analysis , Comparative Balance sheet
Comparative Balance Sheet December 31, 2007 and 2006 2007 2006 Increase or decrease (Amount) % Change Assets Current Assets $340 $280 $60 21.43 Plant assets $675 $520 $155 29.81 Total Assets $1,015 $800 $215 26.88 Liabilities Current Liabilities $180 $120 $60 50.00 Long term debt $250 $160 $90 56.25 Total Liabilities $430 $280 $150 53.57 Shareholder's equity Common Stock $325 $320 $5 1.56 Retained Earning $260 $200 $60 30.00 Total Shareholder's equity(B) $585 $520 $65 12.50 Total Liabilities & Shareholder's equity $1,015 $800 $215 26.88