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 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 when:
(1) Interest Expense is increased.
(2) Property, Plant, and Equipment is increased.
COMPARATIVE ANALYSIS PROBLEM: Tootsie Roll vs. Hershey

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Common Stock Accounts Payable Accounts Receivable Selling, Marketing, and Administrative Expenses Prepaid Expenses Net Property, Plant, and Equipment Net Product Sales $ 24,862 9,140 37,512 103,755 8,562 220,721 495,592