Question

Given the following data for the Corky Company:Current liabilities $ 400Long-term debt 480Common stock 600Retained earnings 520Total liabilities & stockholders' equity $2,000How would common stock appear on a common size balance sheet?

Answer 1

Common Stock 30%

Step-by-step explanation:

a common size balance sheet means to express each value of the balance sheet as a percentage of total assets.

as total liabilities and stockholders' equity is 2,000

From the accounting equation

Assets = Liabilities + Equity

we get that total asset is also 2,000

now we express common stock based on total assets:

600 / 2000 x 100 = 30%