Question

A corporation reported cash of $27,000 and total assets of $461,000 on its balance sheet. its common-size percent for cash equals:

Answer 1

In computing for the common-size percentage for cash, you should determine first the total assets in the business. So, in this problem the amount of total assets is $461,000. Afterwards, divide the amount of each asset found in the balance sheet by the amount of total assets. Then, multiply the answer by 100 to get the percentage form.

So in the given problem, the cash account is $27,000. Divide $27,000 by $461,000, so you'll get 0.058 or 0.06. Multiply this by 100, giving 6% as the common-size percentage for cash. This means the cash account makes up the 6% of the total assets.