Comparative balance sheets for Farinet Company for the past two years are as follows:

Required
1. Using the format in Example 13-4, prepare common-size comparative balance sheets for the two years for Farinet Company.
2. What observations can you make about changes in the relative composition of Farinet€™s accounts from the common-size balance sheets? List at least five observations.
3. Using the format in Example 13-1, prepare comparative balance sheets for Farinet Company, including columns for the dollars and for the percentage increase or decrease in each item on the statement.
4. Identify the five items on the balance sheet that experienced the largest change from one year to the next. For each of these items, explain where you would look to find additional information about thechange.

Transcribed Image Text:

December 31 Total current assets Plant and equipment 6 Total current liabilities Total liabilities and stockholders' equity