Question

Given the following data for the Vaughn Company:

Current liabilities	$ 410
Long-term debt	390
Common stock	690
Retained earnings	810
Total liabilities & stockholders’ equity	$2300

How would common stock appear on a common size balance sheet?

22.0%

72.0%

30.0%

32.0%

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the cash account.

True

False

In horizontal or trend analysis, each item is expressed as a(n)

amount.

percentage.

rate.

amount or a percentage.

Which of the following would not be considered an example of a discontinued operation?

Shifting production processes within an operation

Elimination of a major class of customers

Elimination of an entire activity

Disposal of a significant component of a business

Answer 1

a) Common Size percentage = 690/2300 = 30%

So answer is c) 30%

b) A nalysis of the changes in all of the noncash balance sheet accounts will explain the change in the cash account.

This statement is False

c) In horizontal or trend analysis, each item is expressed as a(n)

So answer is d) Amount or a percentage

d) Which of the following would not be considered an example of a discontinued operation?

So answer is a) Shifting production processes within an operation