Explanation Given Information: The assets and liabilities for Miss Muffins’ bakery for December 31, 2016 are, The assets are $1762 in cash, $3785 in accounts receivable, and $2036 in merchandise inventory. The liabilities are $3631 in accounts payable, $1421 in wages payable and the owner’s capital is $2531. The assets and liabilities for Miss Muffins’ bakery for December 31, 2017 are, The assets are $1985 in cash, $4219 in accounts receivable, and $2512 in merchandise inventory. The liabilities are $3483 in accounts payable, $1696 in wages payable and the owner’s capital is $3537. Formula used: 1: Figure out the record and count the total assets using the steps. A: Arrange the current assets and make a line beneath the last entry. B: Add the entries and record the total current assets and making a line beneath the total. C: Repeat step A for plant and equipment assets. Repeat step B for total plant and equipment asses. D: Add the category totals and make a double line beneath the grand total. Total assets = Total current assets + Total plant and equipment 2: Find and record the total liabilities using the steps: A: Perform step 1B for total current liabilities and step 1A for current liabilities. B: Perform step 1B to total long-term liabilities and step 1A to long term liabilities. C: Add the category totals and make a line beneath the total. Total liabilities = Total current liabilities + Total long term liabilities 3: Figure out the total owner’s equity and record. A: Arrange the equity entries and make a line beneath the last most entry. B: sum the entries and make a line beneath the last most entry. 4: figure out the total liabilities and record owner’s equity. Sum the total liabilities to the total owner’s equity and make a double line below the grand total. Total liabilities and owner's equality = Total liabilities + Owner's equity 5: A: Make sure that the two line grand totals from step 1 and step 4 are equal. Total Assets = Total liabilities + Owner's equity B: Make an extra column and label it as percent: For every item divide the number of the items by the total assets and then multiply with 100% to get the results in percent, Percent of total assets = amount of item total assets × 100 % Calculation: Consider the assets and liabilities for Miss Muffins’ bakery for December 31, 2017 are, The assets are $1985 in cash, $4219 in accounts receivable, and $2512 in merchandise inventory where the liabilities are $3483 in accounts payable, $1696 in wages payable and the owner’s capital is $3537. Therefore, the total assets are, Total Assets = $ 1985 + $ 4219 + $ 2512 = $ 8716 For every item divide the number of the items by the total assets and then multiply with 100% to get the results in percent, Percentage of cash, Cash = 1985 8716 × 100 % = 22.8 % Percentage accounts receivable, Accounts receivable = 4219 8716 × 100 % = 48.4 % Percentage merchandise as, Merchandise inventory = 2512 8716 × 100 % = 28.8 % Percentage payable as, Accounts payable = 3483 8716 × 100 % = 40.0 % Percentage wages as Wages payable = 1696 8716 × 100 % = 19.5 % Percentage total current liabilities Total current liabilities = 5179 8716 × 100 % = 59.4 % Percentage capital as, B . Pierson, capital = 3537 8716 × 100 % = 40.6 % Consider the assets and liabilities for Miss Muffins’ bakery for December 31, 2016 are, The assets are $1762 in cash, $3785 in accounts receivable, and $2036 in merchandise inventory where the liabilities are $3631 in accounts payable, $1421 in wages payable and the owner’s capital is $2531

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Author: NOBLE

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Chapter 21.1, Problem 6SE

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To calculation: A vertical analysis for the balance sheet for Miss Muffins’ bakery for December 31, 2016 and 2017.

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Chapter 21.1, Problem 5SE

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Chapter 21 Solutions

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To calculation: A vertical analysis for the balance sheet for Miss Muffins’ bakery for December 31, 2016 and 2017.

Solution Summary: The author analyzes the balance sheet for Miss Muffins' bakery for December 31, 2016 and 2017 using the following steps: Arrange the current assets and make a line beneath the last entry.

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To calculation: A vertical analysis for the balance sheet for Miss Muffins’ bakery for December 31, 2016 and 2017.

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Chapter 21 Solutions