Please answer questions 1-3 and fill out both charts columns ( Different and % C
ID: 2609479 • Letter: P
Question
Please answer questions 1-3 and fill out both charts columns ( Different and % Change) as well as the (percentage). I can't award credit if all questions and charts are not completed.
Balance sheet data for Silver Corporation are presented here.
Using Comparative Analysis
SILVERT CORPORATION
Balance Sheet
December 31
Different
% Change
2012
2011
ASSET
Cash
$ 28,000
$ 20,000
Receivable (net)
70,000
62,000
Other current assets
90,000
73,000
Long-term investment
62,000
60,000
Plant and equipment (net)
510,000
470,000
Total Assets
$ 760,000
$ 685,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
$ 75,000
$ 70,000
Long-term debt
80,000
90,000
Common stock
330,000
300,000
Retained earnings
275,000
225,000
760,000
685,000
Income Statement Date for Paul’s Guitar Shop Inc.
Using Common Size
Revenue
Percentage
Merchandise sales
$24,800
Other Income
3,000
Total Revenues
$27,800
Expenses
Office supplies
10,200
Depreciation expenses
2,000
Wage expense
750
Rent expense
500
Interest expense
500
Supplies expense
500
Utilities
400
Total Expenses
14,850
Net Profit
$12,950
INSTRUCTIONS:
1] Use the balance sheet and apply the comparative analysis to determine the difference and % change.
2] Use the income statement and apply the common size to determine the % change.
3] Please provide the interpretation on both statements analysis.
Balance sheet data for Silver Corporation are presented here.
Using Comparative Analysis
SILVERT CORPORATION
Balance Sheet
December 31
Different
% Change
2012
2011
ASSET
Cash
$ 28,000
$ 20,000
Receivable (net)
70,000
62,000
Other current assets
90,000
73,000
Long-term investment
62,000
60,000
Plant and equipment (net)
510,000
470,000
Total Assets
$ 760,000
$ 685,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
$ 75,000
$ 70,000
Long-term debt
80,000
90,000
Common stock
330,000
300,000
Retained earnings
275,000
225,000
760,000
685,000
Explanation / Answer
1) SILVERT CORPORATION Balance Sheet 31-Dec Difference % Change 2012 2011 ASSET Cash 28000 20000 8000 40.00% Receivable (net) 70000 62000 8000 12.90% Other current assets 90000 73000 17000 23.29% Long-term investment 62000 60000 2000 3.33% Plant and equipment (net) 510000 470000 40000 8.51% Total Assets 760000 685000 75000 10.95% LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities 75000 70000 5000 7.14% Long-term debt 80,000 90,000 -10000 -11.11% Common stock 330,000 300,000 30000 10.00% Retained earnings 275,000 225,000 50000 22.22% Total liabilities and stockholders' equity 760,000 685,000 75000 10.95% 2) Income Statement Date for Paul’s Guitar Shop Inc. Using Common Size Revenue Percentage Merchandise sales 24800 89.21% Other Income 3,000 10.79% Total Revenues 27800 100.00% Expenses Office supplies 10200 36.69% Depreciation expenses 2,000 7.19% Wage expense 750 2.70% Rent expense 500 1.80% Interest expense 500 1.80% Supplies expense 500 1.80% Utilities 400 1.44% Total Expenses 14,850 53.42% Net Profit 12950 46.58% 3) SILVERT CORPORATION: The total assets has increased by 10% The increase is mainly in current assets. The total current assets has increased by 21.2% [(188000-155000)/155000] LT debt has been repaid to the extent of 10%. The required funds for the increase in assets and payment of long term debt has mainly come from common equity and net income. PAUL'S GUITAR SHOP: Out of the revenues, merchandise sales constitutes 89.21%. The major expense is office supplies which accounts for 36.69% of total revenues; depreciation is 7.19% and wages is 2.7%. other expenses are trivial. The total expense is 53.42% of revenue and the Net Profit 46.58% of revenue.