Questions: Question 2 of 10 Given the following data for the Flounder Company: Current liabilities - 610 Long-term debt - 610 Common stock - 800 Retained earnings - 1180 Total liabilities stockholders' equity - 3200 How would common stock appear on a common size balance sheet? 25% 68% 15% 27%

Question 2 of 10 Given the following data for the Flounder Company: Current liabilities - 610 Long-term debt - 610 Common stock - 800 Retained earnings - 1180 Total liabilities stockholders' equity - 3200 How would common stock appear on a common size balance sheet? 25% 68% 15% 27%
Transcript text: Question 2 of 10 View Policies Current Attempt in Progress Given the following data for the Flounder Company: \begin{tabular}{lr} Current liabilities & $\$ 610$ \\ Long-term debt & 610 \\ Common stock & 800 \\ Retained earnings & 1180 \\ Total liabilities \& stockholders' equity & $\boxed{\$ 3200}$ \end{tabular} How would common stock appear on a common size balance sheet? $25 \%$ $68 \%$ $15 \%$ $27 \%$ Save for Later
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Solution

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Solution Steps

To determine how common stock would appear on a common size balance sheet, we need to express the common stock as a percentage of the total liabilities and stockholders' equity. This is done by dividing the common stock value by the total liabilities and stockholders' equity and then multiplying by 100 to get the percentage.

Solution Approach
  1. Identify the value of common stock.
  2. Identify the total liabilities and stockholders' equity.
  3. Calculate the percentage of common stock relative to the total.
Step 1: Identify the Value of Common Stock

The value of common stock is given as: \[ \text{Common Stock} = \$800 \]

Step 2: Identify the Total Liabilities and Stockholders' Equity

The total liabilities and stockholders' equity is given as: \[ \text{Total Liabilities and Stockholders' Equity} = \$3200 \]

Step 3: Calculate the Percentage of Common Stock

To find the percentage of common stock relative to the total liabilities and stockholders' equity, we use the formula: \[ \text{Percentage} = \left( \frac{\text{Common Stock}}{\text{Total Liabilities and Stockholders' Equity}} \right) \times 100 \]

Substituting the given values: \[ \text{Percentage} = \left( \frac{800}{3200} \right) \times 100 \]

Step 4: Simplify the Expression

Simplify the fraction and calculate the percentage: \[ \text{Percentage} = \left( \frac{1}{4} \right) \times 100 = 25.00\% \]

Final Answer

\(\boxed{25\%}\)

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