Express the Following Balance Sheets for Safety Company in Common-Size

question 56

Essay

Express the following balance sheets for Safety Company in common-size percentages.
Safety Company Balance Sheets
December 31, 2017 and 2016

$\begin{array}{|l|c|c|}\hline&2017&2016\\\hline \text { Assets } & & \\\hline \text { Cash } & \$ 43,000 & \$ 22,000 \\\hline \text { Accounts receivable } & 38,000 & 42,000 \\\hline \text { Merchandise inventory } & 61,000 & 52,000 \\\hline \text { Prepaid insurance } & 6,000 & 9,000 \\\hline \text { Long-term investments } & 49,000 & 20,000 \\\hline \text { Plant assets (net) } & \underline{218,000} & \underline{218,000} \\\hline \text { Total assets } & \$ 415,000 & \underline{\$ 363,000} \\\hline & & \\\hline \text { Liabilities and Equity } & & \\\hline \text { Current liabilities } & \$ 62,000 & \$ 75,000\\\hline \end{array}$ $$\begin{array} {| l | c | c| } \hline \text { Current liabilities } & \$ 62,000 & \$ 75,000 \\\hline \text { Long-term liabilities } & 45,000 & 36,000 \\\hline \text { Common stock } & 150,000 & 150,000 \\\hline \text { Retained earnings } & 158,000 & 102,000 \\\hline \text { Total liabilities and equity } & \$ 415,000 & \$ 363,000 \\\hline\end{array}$$

---

Definitions:

Preauthorized Payment

A financial arrangement that allows a business or individual to automatically debit funds from a customer's bank account for recurring expenses.

Total Collection Time

The period it takes for a business to convert its credit sales into cash, encompassing the entire process from sale to cash collection.

Cash Management

The process of collecting, managing, and investing a company's cash flow in a way that maintains or increases the company's liquidity.

Temporary Excess Cash

Surplus cash not required for immediate operational or investment needs, often invested in short-term securities.