Given the following data for the King Company: $$\begin{array} { l r }
\text { Current liabilities } & \$ 400 \
\text { Long-term debt } & 480 \
\text { Common stock } & 700 \
\text { Retained earnings } & 920 \
\text { Total liabilities \& stockholders' equity } & \$ 2,500
\end{array}$$ How would common stock appear on a common size balance sheet?
A) 20%
B) 70%
C) 28%
D) 30%

Question

Given the following data for the King Company: $$\begin{array} { l r } 
\text { Current liabilities } & \$ 400 \
\text { Long-term debt } & 480 \
\text { Common stock } & 700 \
\text { Retained earnings } & 920 \
\text { Total liabilities \& stockholders' equity } & \$ 2,500
\end{array}$$ How would common stock appear on a common size balance sheet?
A) 20%
B) 70%
C) 28%
D) 30%

Quizplus · Accepted Answer

Common stock would appear as a percentage of total liabilities and stockholders' equity. The calculation is $ \frac{700}{2500} \times 100 = 28\% $.

Given the Following Data for the King Company How Would Common Stock Appear on a Common Size Balance