The comparative balance sheet of Stuart Company
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12. The comparative balance sheet of Stuart Company appears below: 20pt
STUART COMPANY
Comparative Balance Sheet
December 31,
Assets 2007 2006
Current assets $ 340 $280
Plant assets 675 520
Total assets $1,015 $800
Liabilities and stockholders
' equity
Current liabilities $ 180 $120
Long-term debt 250 160
Common stock 325 320
Retained earnings 260 200
Total liabilities
and stockholders' equity $1,015 $800
Instructions
(a) Using horizontal analysis, show the percentage change for each balance sheet item using 2006 as a base year.
(b) Using vertical analysis, prepare a common size comparative balance sheet.
13. The Brawn Company had a $400 credit balance in Allowance for Doubtful Accounts at December 31, 2007, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following: 20pts
Estimated Percentage
Uncollectible
Current Accounts $140,000 1%
1-30 days past due 15,000 3%
31-60 days past due 12,000 6%
61-90 days past due 5,000 12%
Over 90 days past due 7,000 30%
Total Accounts Receivable $179,000
Instructions
a) Prepare the Estimated Uncollectible schedule for each percentage.
b) Prepare the adjusting entry on December 31, 2007, to recognize bad debts expense.
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