Comparative Financial Statements for Larson Company, Prepared on December 31

question 49

Essay

Comparative financial statements for Larson Company, prepared on December 31 are shown below:
$\begin{array}{c}\begin{array}{l}\text {Income Statement}\\\text {Sales revenue}\\\text {Cost of goods sold}\\\text {Gross profit}\\\text {Operating expenses and interest }\\\text {expense}\\\text {Pretax income}\\\text {Income tax}\\\text {Net income}\\\\\text {Balance Sheet}\\\text {Cash}\\\text {Accounts receivable (net)}\\\text {Inventory}\\\text {Operational assets(net)}\\\\\text {Current liabilities (no interest)}\\\text {Long-term liabilities (10\% interest)}\\\text {Common stock par \$ 5}\\\text {Retained earnings}\\\\\end{array}\begin{array}{l}2012\\\$190,000\\\underline{112,000}\\78,000\\\underline{56,000}\\22,000\\\underline{8,000}\\\underline{14,000}\\\\\\\$4,000\\14,000\\40,000\\\underline{45,000}\\\underline{103,000}\\\$16,000\\45,000\\30,000\\\underline{12,000}\\\underline{103,000}\end{array}\begin{array}{l}2011\\\$167,000\\\underline{100,000}\\67,000\\\underline{53,000}\\14,000\\\underline{4,000}\\\underline{10,000}\\\\\\\$7,000\\18,000\\34,000\\\underline{38,000}\\\underline{97,000}\\\$17,000\\45,000\\30,000\\\underline{5,000}\\\underline{97,000}\end{array}\end{array}$
Required:
Assume that one-third of sales are on credit and that cash dividends of $3,000 were declared and paid in 2012. Then, complete a percentage change income statement and a percentage change balance sheet for the company, using both amount and percentage changes from 2011 to 2012.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.