question archive Bethesda Mining Company reports the following balance sheet information for 2018 and 2019
Bethesda Mining Company reports the following balance sheet information for 2018 and 2019
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Bethesda Mining Company reports the following balance sheet information for 2018 and 2019. Prepare the 2018 and 2019 common-size balance sheets for Bethesda Mining. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) BETHESDA MINING COMPANY Balance Sheets as of December 31, 2018 and 2019 2018 2019 Assets Current assets Cash $ % $ % Accounts receivable % % 31,982 58,781 131,971 222,734 41,399 79,139 198,632 319,170 % % $ % % $ % % 657,447 880,181 589,328 908,498 $ % $ % Inventory Total Fixed assets Net plant and equipment Total assets Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total $ % $ 201,111 % % % 193,422 88,520 281,942 244,000 $ % $ 140,088 341,199 180,750 % $ % $ % $ % $ % Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total liabilities and owners' equity % % 211,000 143,239 354,239 880,181 211,000 175,549 386,549 908,498 $ $ % % % % $ $
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Solution :
Preparation of common size balance sheet:
The common size balance sheet is prepared by expressing the balance sheet items as a fraction of total assets.
It involves converting each balance item into a ratio expressed as a percentage of total assets.
For example : As per the Information given in the question
For the Year 2018
Cash = $ 31,982 ; Total Assets = $ 880,181 ;
Thus the common size ratio for cash for the year 2018 is = $ 31,982 / $ 880,181 = 3.63 %
For the Year 2019
Cash = $ 41,399 ; Total Assets = $ 908,498 ;
Thus the common size ratio for cash for the year 2019 is = $ 41,399 / $ 908,498 = 4.56 %
Similarly the values for the other balance sheet items can be obtained using the above process.
Please find the attached screenshot of the excel sheet containing the Common size balance sheets for the Year 2018 and 2019.
Also find attached the screenshot of the excel sheet containing the formulas used for the calculation of the same.
Please see the attached file for the complete solution
