The financial statements of Tootsie Roll in Appendix A at the back of this book contain the following selected accounts, all in thousands of dollars:

Instructions

(a) What is the increase and decrease side for each account? What j is the normal balance for each account?

(b) Identify the probable other account in the transaction and the effect on that account when:
(1) Accounts Receivable is decreased.
(2) Accounts Payable is decreased.
(3) Prepaid Expenses is increased.

(c) Identify the other account(s) that ordinarily would be involved noe (1) Interest Expense is increased.
(2) Property, Plant, and Equipment is increased.
COMPARATIVE ANALYSIS PROBLEM: Tootsie Roll vs. Hershey Foods

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Common Stock $ 22,527 Accounts Payable 12,450 Accounts Receivable 19,110 Selling, Marketing, and Administrative Expense 97,071 Prepaid Expenses 3,081 Property, Plant, and Equipment (net) 83,024 Net Sales 388,659