Question

Compute and select the correct common-size percent for each account title.Total Assets is $700,000 Accounts Payable is $75,000 Bonds Payable is $225,000 Common Stock is $300,000 Retained Earnings is $100,000

Answer 1

Answer and Explanation:

The computation for each corrected common-size percent for each account is shown below:

Particulars Amount Percentage

Total assets $700,000 100%

Accounts payable $75,000 10.71%

($75,000 ÷ $700,000)

Bonds payable $225,000 32.14%

($225,000 ÷ $700,000)

Common stock $300,000 42.86%

($300,000 ÷ $700,000)

Retained earnings $100,000 14.29%

($100,000 ÷ $700,000)

Therefore each one of assetm liabilities and stockholder equity is presented as a percentage of total assets and the same is to be considered