Instructions for the Microsoft Excel Templates by Rex A Schildhouse Extensive detail and information is contained within the help function of Microsoft Excel and And information or data which may be required by the solution will be entered in cells with b Be advised, the template workbooks and worksheets are not protected. Overtyping any data may remove it. page. This information will be printed on the top of each page if the template requires more than one page. Each template is set to print with File Name, Page # of # Page(s), the print date, and the pr time to assist in assembly of multiple pages. If more than one page is required by the template, manual page breaks have been set to provid consistent presentation. All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells. In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriat Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provid in the template and in the text for that step of the challenge. This is entry may be a "Look formula to another cell where that information has been provided or previously entered. Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the prop indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable. Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" ent the appropriate numerical value for that step of the challenge. The cell is formatted for pro presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digit (decimals) are also set through formatting for common presentation. Since the formatting of t Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with border
Transcript
Instructions for the Microsoft Excel Templates by Rex A Schildhouse
Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text.
And information or data which may be required by the solution will be entered in cells with borders to help identify them.
Be advised, the template workbooks and worksheets are not protected.Overtyping any data may remove it.
You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires more than one page.
Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly of multiple pages.
If more than one page is required by the template, manual page breaks have been set to provide consistent presentation.
All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells.
In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriate to the entry, or text answers to questions.
Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in the format set in the template.
Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously entered.
Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title without typing it.
Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable.
Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of the formatting found in the templates to meet your desires.
Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel.
Where a yellow highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed over.
Where a yellow highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in General Journal number six."
The print area is defined to fit onto 8 1/2" × 11" sheets in portrait or landscape mode as required. Margins are generally set to no less than 1/2" so most printers can print them without a problem. If you printer cannot accept margins less than 1" you may have to reformat the margins through Page Setup.
The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the View menu and selecting "Unfreeze Panes" under "Freeze Panes."
When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400. Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative value if both cells E10 and E11 contain positive values.
Microsoft Office and Microsoft Excel are products of, and copyrighted by,Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399
document.xlsx, E24-2 Solution, Page 3 of 18, 04/07/2023, 21:43:32
Name: Solution Date:
Instructor: Course:
2. Introduction of a new product line.3. Loss of assembly plant due to fire.4. Sale of a significant portion of the company's assets.5. Retirement of the company president.6. Issuance of a significant number of shares of common stock.7. Loss of a significant customer.8. Prolonged employee strike.9. Material loss on a year-end receivable because of customer's bankruptcy.10. Hiring of a new president.11. Settlement of prior year's litigation against the company.12. Merger with another company of comparable size.
1 a 7 c2 c 8 c3 b 9 a4 b 10 c5 c 11 a6 b 12 b
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E24-2 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.
1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
document.xlsx, E24-2, Page 4 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:
2. Introduction of a new product line.3. Loss of assembly plant due to fire.4. Sale of a significant portion of the company's assets.5. Retirement of the company president.6. Issuance of a significant number of shares of common stock.7. Loss of a significant customer.8. Prolonged employee strike.9. Material loss on a year-end receivable because of customer's bankruptcy.10. Hiring of a new president.11. Settlement of prior year's litigation against the company.12. Merger with another company of comparable size.
1 Enter letter 7 Enter letter2 Enter letter 8 Enter letter3 Enter letter 9 Enter letter4 Enter letter 10 Enter letter5 Enter letter 11 Enter letter6 Enter letter 12 Enter letter
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E24-2 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.
1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
document.xlsx, E24-3 Solution, Page 5 of 18, 04/07/2023, 21:43:32
Name: Solution Date:
Instructor: Course:
W $60,000 $15,000 $167,000 X 10,000 1,500 83,000 Y 23,000 (2,000) 21,000 Z 9,000 1,000 19,000
$102,000 $15,500 $290,000
Instructions:Determine which of the operating segments are reportable based on the:
Revenue test: 10% × $102,000 = $10,200.Segments W ($60,000) and Y ($23,000) both meet this test.
Operating profit test: 10% × ($15,000 + $1,500 + $1,000) = $1,750.Segments W ($15,000) and Y ($2,000 absolute amount) both meet this test.
Identifiable assets test: 10% × $290,000 = $29,000.Segments W ($167,000) and X ($83,000) both meet this test.
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E24-3 (Segmented Reporting) LaGreca Company is involved in four separate industries. The following information is available for each of the four industries.Operating
SegmentTotal
RevenueOperating
Profit (Loss)Identifiable
Assets
(a) Revenue test.
(b) Operating profit (loss) test.
(c) Identifiable assets test.
document.xlsx, E24-3, Page 6 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:
W $60,000 $15,000 $167,000 X 10,000 1,500 83,000 Y 23,000 (2,000) 21,000 Z 9,000 1,000 19,000
$102,000 $15,500 $290,000
Instructions:Determine which of the operating segments are reportable based on the:
Enter answer in this areaEnter answer in this area
Enter answer in this areaEnter answer in this area
Enter answer in this areaEnter answer in this area
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E24-3 (Segmented Reporting) LaGreca Company is involved in four separate industries. The following information is available for each of the four industries.Operating
SegmentTotal
RevenueOperating
Profit (Loss)Identifiable
Assets
(a) Revenue test.
(b) Operating profit (loss) test.
(c) Identifiable assets test.
document.xlsx, P24-3 Solution, Page 7 of 18, 04/07/2023, 21:43:32
Name: Solution Date:
Instructor: Course:
through a public subscription of common stock. Daniel Brown, who owns 15% of the
Topeka National Bank, asking for a 24-month extension on two $35,000 notes, which are due on June 30, 2013, and September 30, 2013. Another note of $6,000 is due on March 31, 2014, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn’s cash flow problems are due primarily to the company’s desire to finance a $300,000 plant expansion over the next 2 fiscal years through internally generated funds.
The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years.
BRADBURN CORPORATIONStatement of Financial Position
388,000 282,000 Total liabilities and owners' equity $1,852,000 $1,740,500
BRADBURN CORPORATIONIncome Statement
For The Fiscal Year Ended March 312013 2012
Sales $3,000,000 $2,700,000 Cost of goods sold 1,530,000 1,425,000 Gross margin 1,470,000 1,275,000 Operating expenses 860,000 780,000 Income before income taxes 610,000 495,000 Income taxes 244,000 198,000 Net income after income taxes $366,000 $297,000
Depreciation charges on the plant and equipment of $100,000 and $102,500 for the fiscal years ended March 31, 2012, and 2013, respectively, are included in cost of goods sold.
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P24-3 (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago
common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, Daniel Brown approached the
Retained earningsa
aCash dividends were paid at the rate of $1.00 per share in fiscal year 2012 and $2.00 per share in fiscal year 2013.
document.xlsx, P24-3 Solution, Page 8 of 18, 04/07/2023, 21:43:32
Name: Solution Date:
Instructor: Course:Instructions:Fill in the provided matrix and utilize it as the matrix for "VLOOKUP" formulas within the cells below.
Column 4 Column 52013 2012
Average inventory - 2011 77,500 Average total assets 1,796,250 1,714,500 Total Assets = Mar 31, 2009 1,688,500 Total Assets = Mar 31, 2010 1,740,500 Total Assets = Mar 31, 2011 1,852,000 Cost of goods sold 1,530,000 1,425,000 Current assets 403,000 320,000 Current liabilities 164,000 158,500 Dividends 130,000 130,000 Depreciation 102,500 100,000 Gross margin 1,470,000 1,275,000 Income before taxes 610,000 495,000 Income taxes (40%) 244,000 198,000 Inventories = EOY 2010 50,000 Inventories = EOY 2011 105,000 Net income after taxes 366,000 297,000 Operating expenses 860,000 780,000 Sales 3,000,000 2,700,000
2012 Current ratio = $320,000
---------------- = 2.02 to 1$158,500
2013 Current ratio = $403,000
---------------- = 2.46 to 1$164,000
2012 Quick ratio = $270,000
---------------- = 1.70$158,500 to 1
2013 Quick ratio = $298,000
---------------- = 1.82$164,000 to 1
2013 Inventory Turnover = $1,530,000
---------------- = 19.74$77,500 to 1
(a) Compute the following items for Bradburn Corporation:(1) Current ratio for fiscal years 2012 and 2013.
Current assets ----------------------- =
Current liabilities
Current assets ----------------------- =
Current liabilities
(2) Acid-test (quick) ratio for fiscal years 2012 and 2013.
Current assets - Inventories ----------------------- =
Current liabilities
Current assets - Inventories ----------------------- =
Current liabilities
(3) Inventory turnover for fiscal year 2013.
Cost of goods sold ------------------------------------ =
Average inventory
document.xlsx, P24-3 Solution, Page 9 of 18, 04/07/2023, 21:43:32
Name: Solution Date:
Instructor: Course:$1,688,500
at March 31, 2009.)
2012 Return on assets = $297,000
---------------- = 17.3%$1,714,500
2013 Return on assets = $366,000
---------------- = 20.4%$1,796,250
2012 2013 Change Percent ChangeSales $3,000 $2,700 $300 11.11%Cost of goods sold 1,530 1,425 105 7.37%Gross margin 1,470 1,275 195 15.29%Net income after taxes 366 297 69 23.23%
1
2
3
4 An examination as to the extent that leverage is being used by Bradburn.
(4) Return on assets for fiscal years 2012 and 2013. (Assume total assets were
Net income ----------------------- =Average total assets
Current assets ----------------------- =
Current liabilities
(5) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2012 to 2013. Omit "000" from the values.
(b) Identify and explain what other financial reports and/or financial analyses might be helpful to the commercial loan officer of Topeka National Bank in evaluating Daniel Brown’s request for a time extension on Bradburn’s notes.
Other financial reports and financial analyses which might be helpful to the commercial loan officer of Topeka National Bank include:
The statement of cash flows would highlight the amount of cash provided by operating activities, the other sources of cash, and the uses of cash for the acquisition of long-term assets and long-term debt requirement.
Projected financial statements for 2014 including a projected statement of cash flows. In addition, a review of Bradburn’s comprehensive budgets might be useful. These items would present management’s estimates of operations for the coming year.
A closer examination of Bradburn’s liquidity by calculating some additional ratios, such as day’s sales in receivables, accounts receivable turnover, and day’s sales in inventory.
document.xlsx, P24-3 Solution, Page 10 of 18, 04/07/2023, 21:43:32
Name: Solution Date:
Instructor: Course:
2013 2014 2015Sales $3,000.0 $3,333.3 $3,703.7 Cost of goods sold 1,530.0 1,642.7 1,763.8 Gross margin 1,470.0 1,690.6 1,939.9 Operating expenses 860.0 948.2 1,045.5 Income before taxes 610.0 742.4 894.5 Income taxes (40%) 244.0 297.0 357.8 Net income $366.0 $445.4 $536.7
Assumptions:Sales increase at a rate of [($3,000,000 - $2,700,000) / $2,700,000] 11.11%Cost of goods sold increases at rate of [($1,530,000 - $1,425,000) / $1,425,000] 7.37%despite depreciation remaining constant.Other operating expenses increase at the same rate experienced from 2010 to 2011; i.e., at[($860,000 - $780,000) / $780,000) 10.26%Depreciation remains constant at $102,500 Dividends remain at $2.00 per share.Plant expansion is financed equally over the two years( $150,000 each year).Loan extension is granted.
(c) Assume that the percentage changes experienced in fiscal year 2013 as compared with fiscal year 2012 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburn’s desire to finance the plant expansion from internally generated funds realistic? Discuss.
Bradburn Corporation should be able to finance the plant expansion from internally generated funds as shown in the calculations presented below.
(d) Should Topeka National Bank grant the extension on Bradburn’s notes considering Daniel Brown’s statement about financing the plant expansion through internally generated funds? Discuss.
Topeka National Bank should probably grant the extension of the loan, if it is really required, because the projected cash flows for 2014 and 2015 indicate that an adequate amount of cash will be generated from operations to finance the plant expansion and repay the loan. In actuality, there is some question whether Bradburn needs the extension because the excess funds generated from 2014 operations might cover the $70,000 loan repayment. However, Bradburn may want the loan extension to provide a cushion because its cash balance is low. The financial ratios indicate that Bradburn has a solid financial structure. If the bank wanted some extra protection, it could require Bradburn to appropriate retained earnings for the amount of the loan and/or restrict cash dividends for the next two years to the 2013 amount of $2.00 per share.
document.xlsx, P24-3, Page 11 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:
through a public subscription of common stock. Daniel Brown, who owns 15% of the
Topeka National Bank, asking for a 24-month extension on two $35,000 notes, which are due on June 30, 2013, and September 30, 2013. Another note of $6,000 is due on March 31, 2014, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn’s cash flow problems are due primarily to the company’s desire to finance a $300,000 plant expansion over the next 2 fiscal years through internally generated funds.
The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years.
BRADBURN CORPORATIONStatement of Financial Position
388,000 282,000 Total liabilities and owners' equity $1,852,000 $1,740,500
SANDBURG CORPORATIONIncome Statement
For The Fiscal Year Ended March 312013 2012
Sales $3,000,000 $2,700,000 Cost of goods sold 1,530,000 1,425,000 Gross margin 1,470,000 1,275,000 Operating expenses 860,000 780,000 Income before income taxes 610,000 495,000 Income taxes 244,000 198,000 Net income after income taxes $366,000 $297,000
Depreciation charges on the plant and equipment of $100,000 and $102,500 for the fiscal years ended March 31, 2012, and 2013, respectively, are included in cost of goods sold.
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P24-3 (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago
common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, Daniel Brown approached the
Retained earningsa
aCash dividends were paid at the rate of $1.00 per share in fiscal year 2012 and $2.00 per share in fiscal year 2013.
document.xlsx, P24-3, Page 12 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:Instructions:Fill in the provided matrix and utilize it as the matrix for "VLOOKUP" formulas within the cells below.
Column 4 Column 52013 2012
Average inventory - 2011 FormulaAverage total assets Formula FormulaTotal Assets = Mar 31, 2009 FormulaTotal Assets = Mar 31, 2010 FormulaTotal Assets = Mar 31, 2011 AmountCost of goods sold Amount AmountCurrent assets Amount AmountCurrent liabilities Amount AmountDividends Amount AmountDepreciation Amount AmountGross margin Amount AmountIncome before taxes Amount AmountIncome taxes (40%) Amount AmountInventories = EOY 2010 AmountInventories = EOY 2011 AmountNet income after taxes Amount AmountOperating expenses Amount AmountSales Amount Amount
2012 Current ratio = Amount
---------------- = Formula to 1Amount
2013 Current ratio = Formula
---------------- = Formula to 1Formula
2012 Quick ratio = Formula
---------------- = FormulaFormula to 1
2013 Quick ratio = Formula
---------------- = FormulaFormula to 1
2013 Inventory Turnover = Amount
---------------- = Formula#N/A to 1
(a) Compute the following items for Bradburn Corporation:(1) Current ratio for fiscal years 2012 and 2013.
Current assets ----------------------- =
Current liabilities
Current assets ----------------------- =
Current liabilities
(2) Acid-test (quick) ratio for fiscal years 2012 and 2013.
Current assets - Inventories ----------------------- =
Current liabilities
Current assets - Inventories ----------------------- =
Current liabilities
(3) Inventory turnover for fiscal year 2013.
Cost of goods sold ------------------------------------ =
Average inventory
document.xlsx, P24-3, Page 13 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:$1,688,500
at March 31, 2011.)
2012 Return on assets = Formula
---------------- = FormulaFormula
2013 Return on assets = Formula
---------------- = FormulaFormula
2012 2013 Change Percent ChangeSales Formula Formula Formula FormulaCost of goods sold Formula Formula Formula FormulaGross margin Formula Formula Formula FormulaNet income after taxes Formula Formula Formula Formula
Note: The formulas in some cell formulas are "live" and need values placed in their source cells.
1 Enter text answer as appropriate.
2 Enter text answer as appropriate.
3 Enter text answer as appropriate.
4 Enter text answer as appropriate.
(4) Return on assets for fiscal years 2012 and 2013. (Assume total assets were
Net income ----------------------- =Average total assets
Current assets ----------------------- =
Current liabilities
(5) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2012 to 2013. Omit "000" from the values.
(b) Identify and explain what other financial reports and/or financial analyses might be helpful to the commercial loan officer of Topeka National Bank in evaluating Daniel Brown’s request for a time extension on Bradburn’s notes.
Other financial reports and financial analyses which might be helpful to the commercial loan officer of Spokane National Bank include:
document.xlsx, P24-3, Page 14 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:
Enter text answer as appropriate.
2013 2014 2015Sales Formula Formula FormulaTitle Formula Formula FormulaGross margin Formula Formula FormulaTitle Formula Formula FormulaIncome before taxes Formula Formula FormulaTitle Formula Formula FormulaNet income Formula Formula Formula
Add: Title Amount AmountDeduct: Title Amount AmountNote repayment AmountFunds available for plant expansion Formula FormulaPlant expansion Amount AmountExcess funds Formula Formula
Assumptions:Sales increase at a rate ofCost of goods sold increases at rate ofdespite depreciation remaining constant.Other operating expenses increase at the same rate experienced from 2010 to 2011; i.e., at
Depreciation remains constant atDividends remain at per share.Plant expansion is financed equally over the two years( each year).Loan extension is granted.
Enter text answer here.
(c) Assume that the percentage changes experienced in fiscal year 2013 as compared with fiscal year 2012 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburn’s desire to finance the plant expansion from internally generated funds realistic? Discuss.
(d) Should Topeka National Bank grant the extension on Bradburn’s notes considering Daniel Brown’s statement about financing the plant expansion through internally generated funds? Discuss.
document.xlsx, P24-4 Solution, Page 15 of 18, 04/07/2023, 21:43:32
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P 24-4 (Horizontal and Vertical Analysis) Presented below are comparative balance sheets for the Gilmour Company.
(a) Prepare a comparative balance sheet of Gilmour Company showing the percent each item is of the total assets or total liabilities and stockholders' equity.
document.xlsx, P24-4 Solution, Page 16 of 18, 04/07/2023, 21:43:32
(b) Prepare a comparative balance sheet of Gilmour Company showing the dollar change and the percentage change for each item.
(c) Of what value is the additional information provided in part (a)?
The component percentage (common-size) balance sheet makes easier analysis possible. It actually reduces total assets and total liabilities and stockholders’ equity to a common base. Thus, the statement is simplified into figures that can be more readily grasped. It can also show relationships that might be out of line. For example, management might believe that accounts receivable of 6.59% is rather low. Perhaps the company is not granting enough credit. The increased percentage of bonds payable from 6.82% to 13.47% indicates increased leverage which may reflect negatively on the company’s debt-paying ability and long-run solvency. These percentages can be compared with those of other successful firms to see how the firm stands and to see where possible improvements could be made.
(d) Of what value is the additional information provided in part (b)?
A statement such as that in part (b) is a good analysis and breakdown of the total change in assets and liabilities and stockholders’ equity. The statement breaks down the 19.93% increase and makes it easier for analysts to spot any unusual items. The increase is explained on the asset side by an increase in accounts receivable, short-term investments, and fixed assets and on the liability side by an increase in bonds payable and capital stock. This statement makes analysis of the year’s operations generally easier.
document.xlsx, P24-4, Page 17 of 18, 04/07/2023, 21:43:32
Cash Amount Formula Amount FormulaAccounts receivable (net) Amount Formula Amount FormulaShort-term investments Amount Formula Amount FormulaInventories Amount Formula Amount FormulaPrepaid expense Amount Formula Amount FormulaFixed assets Amount Formula Amount FormulaAccumulated depreciation Amount Formula Amount Formula
Total Formula Formula Formula Formula
Liabilities and Stockholders’ EquityAccounts payable Amount Formula Amount FormulaAccrued expenses Amount Formula Amount FormulaBonds payable Amount Formula Amount FormulaCapital stock Amount Formula Amount Formula
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P 24-4 (Horizontal and Vertical Analysis) Presented below are comparative balance sheets for the Gilmour Company.
(a) Prepare a comparative balance sheet of Gilmour Company showing the percent each item is of the total assets or total liabilities and stockholders' equity.
document.xlsx, P24-4, Page 18 of 18, 04/07/2023, 21:43:32
Name: Date:
Instructor: Course:Retained earnings Amount Formula Amount Formula
Total Formula Formula Formula Formula
GILMOUR COMPANYComparative Balance Sheet
December 31, 2013 and 2012December 31 Increase or (Decrease)
Assets 2013 2012 $ Change % ChangeCash Amount Amount Formula FormulaAccounts receivable (net) Amount Amount Formula FormulaShort-term investments Amount Amount Formula FormulaInventories Amount Amount Formula FormulaPrepaid expense Amount Amount Formula FormulaFixed assets Amount Amount Formula FormulaAccumulated depreciation Amount Amount Formula Formula
Total Formula Formula Formula Formula
Liabilities and Stockholders’ EquityAccounts payable Amount Amount Formula FormulaAccrued expenses Amount Amount Formula FormulaBonds payable Amount Amount Formula FormulaCapital stock Amount Amount Formula FormulaRetained earnings Amount Amount Formula Formula
Total Formula Formula Formula Formula
Enter text answer as appropriate.
Enter text answer as appropriate.
(b) Prepare a comparative balance sheet of Gilmour Company showing the dollar change and the percentage change for each item.
(c) Of what value is the additional information provided in part (a)?
(d) Of what value is the additional information provided in part (b)?
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