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Final Answers (Group 1)

The comparative balance sheet shows changes in peso amounts and percentages from 2020 to 2021. Net working capital decreased by P265,000. Current and acid-test ratios decreased slightly. Account receivable and inventory turnover decreased. Trade receivable collection period increased to 89 days. Days to sell inventory increased to 68 days. Payment period increased to 162 days. The common-size balance sheet expresses each item as a percentage of total assets or equities for 2020 and 2021, showing decreases in most asset and equity percentages from 2020 to 2021.

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Carl Roger Anima
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38 views3 pages

Final Answers (Group 1)

The comparative balance sheet shows changes in peso amounts and percentages from 2020 to 2021. Net working capital decreased by P265,000. Current and acid-test ratios decreased slightly. Account receivable and inventory turnover decreased. Trade receivable collection period increased to 89 days. Days to sell inventory increased to 68 days. Payment period increased to 162 days. The common-size balance sheet expresses each item as a percentage of total assets or equities for 2020 and 2021, showing decreases in most asset and equity percentages from 2020 to 2021.

Uploaded by

Carl Roger Anima
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Group 1

1. Required: Compute the following for 2021


1. Net working capital
P 585 , 000−P 320 , 000=P 265 , 000
2. Current ratio
P 585 , 000
=1 . 83׿
P 320 , 000
3. Acid-test ratio
P 85 ,000+ P 25 , 000+ P 245 , 000
P 320 , 000
P 355 , 000
¿
P 320 , 000
¿ 1 .1׿
4. Account receivable turnover
P 1 , 000 ,000
4.1
¿ P 243 , 902 . 43
5. Collection period
365 days
4 . 1(receivable turnover )
¿ 89 days
6. Inventory Turnover
P 250 , 000+ P720 ,000+ P 220 , 000=P1 , 190 , 0000
P 1 , 190 , 000
¿
P 220 , 000
¿5.4
7. Days to sell inventory
P 220 , 000
×365 days=67 .5∨68 days
P 1 , 190 , 000

8. Trade Receivable turnover


P 1 , 000 , 000
P 245 , 000
¿ 4 .1
9. Payment period
365 days
2. 25 ( payableturnover )
¿ 162 days
2. Required:

1. Prepare a comparative balance sheet showing peso and percentage changes for 2021 compared to 2020.
2. Prepare a common-size balance sheet as of December 31, 2020 and 2021.

COMPARATIVE BALANCE SHEET


(2020-2021)

PARTICULARS 2021 2020 Change in Change in


Absolute Value Percentage
I. EQUITY AND LIABILITIES
Shareholder’s Equity
8% Preference Share P9,000 P10,000 -1,000 -10%
Ordinary Shares P42,000 P54,000 -12,000 -22%
Share Premium P5,000 P5,000 0 0
Retained Earnings (P12,000) P13,000 -1,000 -18%
Total Shareholder’s Equity P44,000 P82,000 -38,000 -46%
Total ( Liabilities and P112,000 P164,00 -43,000 -18%
Shareholder’s Equity )
Liabilities
Current Liabilities P47,000 P30,000 17,000 57%
Long-term Liabilities P74,000 P88,000 14,000 16%
Total P121,000 P118,000 31,000 26%

II. ASSET
Current Asset
Cash P5,000 P3,000 2,000 67%
Accounts Receivable P25,000 P40,000 -15,000 -38%
Inventory P30,000 P27,000 3,000 11%
Non-current Asset
Long-term Investment 0 P15,000 -15,000 -100%
Land, Building, and Equipment P75,000 P100,000 -25,000 -25%
Intangible Asset P10,000 P10,000 0 0
Other Asset P20,000 P5,000 15,000 3%
Total P165,000 P200,000
COMMON SIZE BALANCE SHEET
December 31, 2020-2021

Note Absolute Amount Percentage (%) of


PARTICULARS No. Balance Sheet
Previous Current 2020 % 2021 %
Year (2020) Year (2021)
I. EQUITY AND LIABILITIES
Shareholder’s Equity
8% Preference Share P10,000 P9,000 6% 8%
Ordinary Shares P54,000 P42,000 33% 38%
Share Premium P5,000 P5,000 3% 4%
Retained Earnings P13,000 P12,000 8% 11%
Total Shareholder’s Equity P82,000 P44,000 50% 39%
Total ( Liabilities and P164,00 P112,000 100% 100%
Shareholder’s Equity )
Liabilities
Current Liabilities P30,000 P47,000 25% 39%
Long-term Liabilities P88,000 P74,000 75% 61%
Total P118,000 P121,00 100% 100%

II. ASSET
Current Asset
Cash P3,000 P5,000 1.5% 3.03%
Accounts Receivable P40,000 P25,000 20% 15.15%
Inventory P27,000 P30,000 13.5% 18.18%
Non-current Asset
Long-term Investment P15,000 - 7.5% -
Land, Building, and Equipment P100,000 P75,000 50% 45.45%
Intangible Asset P10,000 P10,000 5% 6.06%
Other Asset P5,000 P20,000 2.5% 12.12%
Total P200,000 P165,000 100% 99.99%

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