Question

The balance sheet data below for Randolph Company for two recent years.

Assets	Year 2	Year 1
Current assets	$445	$280
Plant assets	680	520
Total assets	$1,125	$800
Liabilities & Stockholders' Equity
Current liabilities	$285	$120
Long-term debt	255	160
Common stock	325	320
Retained earnings	260	200
Total liabilities and stockholders' equity	$1,125	$800

Required:

a. Using horizontal analysis, show the percentage change for each balance sheet item using Year 1 as a base year. If required, round percentage to one decimal place. If required, use the minus sign to indicate decreases in amounts and percents (negative values).

1. Randolph Company
   Comparative Balance Sheet
   December 31, Year 2 and Year 1
   Assets	Year 2	Year 1	Increase/Decrease Amount	Increase/Decrease Percentage
   Current assets	$445	$280	$	%
   Plant assets	680	520		%
   Total assets	$1,125	$800	$	%
   Liabilities & stockholders' equity
   Current liabilities	$285	$120	$	%
   Long-term debt	255	160		%
   Common stock	325	320		%
   Retained earnings	260	200		%
   Total liabilities and stockholders' equity	$1,125	$800	$	%

   b. Using vertical analysis, prepare a comparative balance sheet. If required, round your answers to one decimal place.

   Randolph Company
   Comparative Balance Sheet
   December 31, Year 2 and Year 1
   Assets	Year 2 Amount	Year 2 Percent	Year 1 Amount	Year 1 Percent
   Current assets	$445	%	$280	%
   Plant assets	680	%	520	%
   Total assets	$1,125	%	$800	%
   Liabilities & stockholders' equity
   Current liabilities	$285	%	$120	%
   Long-term debt	255	%	160	%
   Common stock	325	%	320	%
   Retained earnings	260	%	200	%
   Total liabilities and stockholders' equity	$1,125	%	$800	%

Answer 1

Answer-a)-

RANDOLPH COMPANY
HORIZONTAL ANALYSIS
PARTICULARS	YEAR 2	YEAR 1	INCREASE/DECREASE	%
	$	$	$
ASSETS
Current assets	445	280	165	58.9
Plant assets	680	520	160	30.8
Total assets	1125	800	325	40.6
LIABILITIES AND EQUITY
Current Liabilities	285	120	165	137.5
Long-term debt	255	160	95	59.4
Common stock	325	320	5	1.6
Retained earnings	260	200	60	30.0
Total liabilities and stockholders' equity	1125	800	325	40.6

b)-

RANDOLPH COMPANY
VERTICAL ANALYSIS
PARTICULARS	YEAR 2	%	YEAR 1	%
	$		$
ASSETS
Current assets	445	39.6	280	35.0
Plant assets	680	60.4	520	65.0
Total assets	1125	100.0	800	100.0
LIABILITIES AND EQUITY
Current Liabilities	285	25.3	120	15.0
Long-term debt	255	22.7	160	20.0
Common stock	325	28.9	320	40.0
Retained earnings	260	23.1	200	25.0
Total liabilities and stockholders' equity	1125	100.0	800	100.0