Use the following balance sheet to answer the questions:

Jean M€™s Florida-Style Subs, Inc.: Balance Sheet Ending December 31

As you can see, total liabilities and owner€™s equity equal the total assets.

a.  What is the year-to-year percentage change in the value of the following:

–  Inventory

–  Accounts payable

–  Land

–  Taxes payable

–  Liabilities and OE

b. What is the ratio of the following:

–  Cash equivalent to inventory in 2008? How has it changed from 2007?

–  Owner€™s equity to total assets in 2008? How has it changed from 2007?

c. Investors and buyers like to put their money into companies that havealowratio of liabilities to assets.  Has that ratio becomemoreorless appealing from 2013 to 2014?

Transcribed Image Text:

ASSETS Currents Assets 2014 2013 Cash and cash equivalents $10,000 $10,000 $2,000 $7,000 Accounts receivable $20,000 $25,000 Inventory $32,000 $42,000 Total Current Assets Fixed Assets Plant and machinery $5,000 $9,000 Land $9,000 $8,000 TOTAL ASSETS $46,000 $59,000 Liabilities Accounts payable $10,000 $15,000 Taxes payable $6,000 $5,000 Total Liabilities $16,000 $20,000 Owner's Equity $30,000 $39,000 $46,000 $59,000 LIABILITIES and OWNER'S EQUITY