Question 1

Assets Amounts % of total Assets

Cash $1,844 1.0%
Accounts Receivable 11,807 6.5%
Inventory 9,628 5.3%
Total Current Assets 23,279 12.8%
Plant and Equipment 158,700 87.2%
Total Assets $181,979 100.0%
Liabilities Amounts % of total
Accounts payable $13,446 7.4%
Wages payable 650 0.4%
Property and taxes payable 4,124 2.3%
Total Current Liabilities 18,220 10.0%
Long Term Debt 92,800 51.0%
$111,020 61.0%
Owner's Equity $70,959 39.0%
Total Liabilities and Equity $181,979 100.0%
2011 2010
Assets Amounts Amounts
Cash $1,844 $3,278
Accounts Receivable 11,807 6,954
Inventory 9,628 17,417
Total Current Assets 23,279 27,649
Plant and Equipment 158,700 144,500
Total Assets $181,979 $172,149
Liabilities Amounts Amounts
Accounts payable $13,446 $9,250
Wages payable 650 1,110
Property and taxes payable 4,124 3,650
Total Current Liabilities 18,220 14,010
Long Term Debt 92,800 75,800
$111,020 $89,810
Owner's Equity $70,959 $82,339
Total Liabilities and Equity $181,979 $172,149
Comparative Balance Statement
Contemporary Wood Furniture
December 31, 2011
Total Liabilities
Total Liabilities
Vertical Analysis
Horizontal Analysis
Percent of total assets= amount of item/total assets x100%
Question 2
current assets $23,279
Current Ratio= current liabilities $18,220
total liabilities $111,020
total assets $181,979
$1,844+$11,807+$9,628
$13446+$650+$4124
$23,279
$18,220
$3,278+$6,954+$17,417
$9,250+$1110+$3650
$27,649
$14,010
total assets
$111,020
$181,979
$89,810
$172,149
Question 3
Percent increase (decrease) = amount of increase (decrease)/earlier years amount x 100%
1.27 to 1
Total debt to total ratio= 0.61 to 1
2010 Current Ratio = 1.97
Total debt to total asset ratio = total liabilities
1.28
2011 Current Ratio =
2011 Current Ratio =
2010 Current Ratio =
2011 total debt to total assets ratio =
0.61
2010 total debt to total assets ratio =
0.52
Total debt has increased from 2010 to 2011. The current ratio is much better in 2010, and is approaching the value of 1 for 2011, which is a major concern. The total debt
to total assets ratio is approaching the high range for 2011, which could be a problem. In total, the trends are something to be concerned about. It will be important to
continue to monitor the balance shetts for 2012 to make sure this trend does not continue.
Amounts % of total Assets
$3,278 1.9%
6,954 4.0%
17,417 10.1%
27,649 16.1%
144,500 83.9%
$172,149 100.0%
Amounts % of total
$9,250 5.4%
1,110 0.6%
3,650 2.1%
14,010 8.1%
75,800 44.0%
$89,810 52.2%
$82,339 47.8%
$172,149 100.0%
Percent
Increase Increase
(decrease) (decrease)
($1,434) (43.7)
$4,853 69.8
($7,789) (44.7)
($4,370) (15.8)
$14,200 9.8
$9,830 5.7


$4,196 45.4
($460) (41.4)
$474 13.0
$4,210 30.0
$17,000 22.4
$21,210 23.6
($11,380) (13.8)
$9,830 5.7
Comparative Balance Statement
Contemporary Wood Furniture
December 31, 2010
Percent of total assets= amount of item/total assets x100%
Percent increase (decrease) = amount of increase (decrease)/earlier years amount x 100%
Total debt has increased from 2010 to 2011. The current ratio is much better in 2010, and is approaching the value of 1 for 2011, which is a major concern. The total debt
to total assets ratio is approaching the high range for 2011, which could be a problem. In total, the trends are something to be concerned about. It will be important to
continue to monitor the balance shetts for 2012 to make sure this trend does not continue.
Assets Amounts % of total Assets
Cash $4,000 2.2%
Accounts Receivable 6,000 3.3%
Inventory 15,000 8.2%
Total Current Assets 25,000 13.6%
Plant and Equipment 158,700 86.4%
Total Assets $183,700 100.0%
Liabilities Amounts % of total
Accounts payable $3,500 1.9%
Wages payable 1,500 0.8%
Property and taxes payable 4,124 2.2%
Total Current Liabilities 9,124 5.0%
Long Term Debt 92,800 50.5%
$101,924 55.5%
Owner's Equity $81,776 44.5%
Total Liabilities and Equity $183,700 100.0%
Amounts % of total Net Sales
Net sales $120,000 31.2%
Cost of good sold $85,000
Beginning inventory 6,000 1.6%
Purchases 15,000 3.9%
Goods available for sale 226,000 58.7%
Less: ending inventory 158,700 41.3%
Cost of good sold $384,700 100.0%

Amounts % of total
Gross profits from sales $3,500 0.9%
Operating Expenses 1,500 0.4%
Net Income 4,124 1.1%
9,124 2.4%
December 31, 2011
Income Statement
Balanced Books Bookkeeping
Balance Statement
Balanced Books Bookkeeping
December 31, 2011
Total Liabilities
Percent of total assets= amount of item/total assets x100%
92,800 24.1%
$101,924 26.5%
$282,776 73.5%
$384,700 100.0%
Question 2
current assets
Current Ratio= current liabilities
quick current assets
current liabilities Acid-Test Ratio =
Percent of net sales = amount of item/net sales x 100%

Income Statement
Balanced Books Bookkeeping
Balance Statement
Balanced Books Bookkeeping
Percent of total assets= amount of item/total assets x100%
Assets Amounts Percent
Cash $4,000 10.0%
Accounts Receivable 6,000 15.0%
Inventory 15,000 37.5%
Total Current Assets 25,000 62.5%
Plant and Equipment
Equipment 15,000 37.5%
Total Assets $40,000 100.0%
Liabilities Amounts Percent
Current liabilities
Accounts payable $3,500 8.75%
Wages payable 1,500 3.75%
Insurance payable 500 1.25%
Total Liabilities 5,500 13.75%
Owner's Equity $34,500 86.25%
Total Liabilities and Equity $40,000 100.0%
Amounts Percent
Net sales $120,000 100.0%
Cost of good sold $85,000 70.8%
Gross profit $35,000 29.2%
Operating Expenses
Amounts % of total
Rent $15,000 12.5%
Utilities 6,500 5.4%
Depreciation 2,000 1.7%
Wages 8,000 6.7%
Misc Expenses 1,500 1.3%
Total Operating Expenses 33,000 27.5%
Net Income 2,000 1.7%

December 31, 2011
December 31, 2011
Balanced Books Bookkeeping
Balance Sheet
December 31, 2011
Balanced Books Bookkeeping
Income Statement
For Year Ending December 31
Ratio Analysis:
Current Ratio = Current assets
Current liabilities
$25,000
$5,500
Acit Test Ratio =
Cash + Marketable
securities +
Accounts
Receivables
Current Liabilities
$4000 + 0 + $6000
$5,500
1.82
4.55