Gray Company’s year-end balance sheets follow. (1) Express the balance sheets in common-size percent. Round percent to one decimal. (2) Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? (3) Is the change in merchandise inventory as a percentage of total assets favorable or unfavorable? At December 31 Current Year 1 Year Ago Assets Cash $ 31,800 $ 35,625 Accounts receivable, net 89,500 62,500 Merchandise inventory 112,500 82,500 Prepaid expenses 10,700 9,375 Plant assets, net 278,500 255,000 Total assets $523,000 $445,000
Gray Company’s year-end
|
At December 31 |
Current Year |
1 Year Ago |
|
Assets |
|
|
|
Cash |
$ 31,800 |
$ 35,625 |
|
Accounts receivable, net |
89,500 |
62,500 |
|
Merchandise inventory |
112,500 |
82,500 |
|
Prepaid expenses |
10,700 |
9,375 |
|
Plant assets, net |
278,500 |
255,000 |
|
Total assets |
$523,000 |
$445,000 |
|
Liabilities and Equity |
|
|
|
Accounts payable |
$129,900 |
$ 75,250 |
|
Long-term notes payable |
98,500 |
101,500 |
|
Common stock, $10 par value |
163,500 |
163,500 |
|
|
131,100 |
104,750 |
|
Total liabilities and equity |
$523,000 |
$445,000 |
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