Charles Royston was checking the year- end blances for his wood furniture manufacturing & business & was concerned about the numbers. From what he remembered, his debts & accounts receivable were higher that the previous year. Rather than get worked up over nothing, he decided he would gather the information & make a comparison. For Dec 31, 2011, the business had current assets of: $1,844.00 cash, $11,807.00 accounts receivable, & $9,628.00 inventory. Plant & equipment totaled $158,700. Current liabilities were: accounts payable $13,446.00; wages payable $650.00; & property & taxes payable $4,124. Long term debt totaled $92,800.00 & owner's equity $70,959.00. By comparison, for Dec 31, 2010, the business had current assets of: $3,278.00 cash; $6,954.00 accounts receivable; $17,417.00 inventory. Plant & equipment totaled $144,500.00. Current liabilities were: accounts payable $9,250.00; wages payable $1,110.00; property & taxes payable $3,650.00. Long term debt totaled $75,800.00; & owner's equity $82,339.00.
1. Construct a comparative balance sheet for Contemporary Wood Furniture for year end 2010 & 2011, including a vetical & horizontal analysis of the comparative balance sheet. Express percents to the nearest tenth of a percent. Show step by step solution to the answer.
2. Calculate the current ratio & the total debt to total assets ratio for 2010 & 2011.