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Comparative Balance Sheet : Contemporary Wood Furniture 2010-11

Question 1

Increase/Decrease

Assets

2011

Current assets:
Cash
Accounts receivable
Inventory
Plant and equipment

Total assets

2010

Amount

1,844.00
11,807.00
9,628.00
158,700.00

3,278.00
6,954.00
17,417.00
144,500.00

181,979.00 $

172,149.00 $

(1,434.00)
4,853.00
(7,789.00)
14,200.00
9,830.00

Liabilities and owner's equity


Current liabilities:
Accounts payable
Wages payable
Property and taxes payable
Total current liabilities

13,446.00
650.00
4,124.00
18,220.00 $

9,250.00
1,110.00
3,650.00
14,010.00 $

4,196.00
(460.00)
474.00
4,210.00

Long-term liabilities:
Total long-term liabilities
Total liabilities

$
$

92,800.00 $
111,020.00 $

75,800.00 $
89,810.00 $

17,000.00
21,210.00

Owner's equity:
Total owner's equity

70,959.00 $

82,339.00 $

(11,380.00)

181,979.00 $

172,149.00 $

9,830.00

Total liabilities and owner's equity

Question 2
Ratios
Current Ratio
Total Debt to Total Assets

2011
10
0.7

2010
12.3
0.6

Question 3
The accounts receivable has increased from last year. The inventory level however has decreased.
This means that the company has increased their credit sales. Looking at the company debt, that has increased by 22%
whereas the companies fixed assets have increased by 10%. The owner of the company had a decrease in his equity.
That can mean one of two things, either he withdrew capital from the company or the company did not make any profits.
When looking at all the numbers it shows that the companies cash does not seem to be doing so great.

2010-11

Increase/Decrease
Percent

2011

2010

-14.6
49.4
-79.2
144.5

1.0
6.5
5.3
87.2

1.9
4.0
10.1
83.9

100

100

100

42.7
-4.7
4.8
42.8

7.4
0.4
2.3
10.0

5.4
0.6
2.1
8.1

172.9
215.8

51.0
61.0

44.0
52.2

-115.8

39.0

47.8

100

100

100

ner's equity

that has increased by 22%


a decrease in his equity.
ny did not make any profits.

BALANCE SHEET

AMOUNT

PERCENT

CURRENT ASSETS
Cash
Accounts Recievable
Merchandise Inventory
Equipment

Total Assets

INCOME STATEMENT
Net Sales

4000
6000
15000
15000
40000

10.0
15.0
37.5
37.5
100.0

Cost of Goods Sold


Gross Profit
Operating Expenses

CURRENT LIABILITIES
Accounts Payable
Wages Payable
Insurance Payable

Total Liabilities

3500
1500
500
5500

8.8
3.8
1.3
13.8

Salary
Insurance
Utilities
Rent
Depreciation

Total Operating Expe


Owner's Equity
Capital

34500

Total Liabilities and Owner's


40000
Equity
CURRENT RATIO
ACID TEST RATIO

6.4
0.3

86.3
100.0

Net Income

AMOUNT

PERCENT

120000

100.0

85000

70.8

35000

29.2

8000
500
6500
15000
2000
32000

6.7
0.4
5.4
12.5
1.7
26.7

3000

2.5