Question: The balance sheet data of Ivanhoe Company at the end of 2028 and 2027 follow.
2028 2027
Cash $29,800 $34,800
Accounts receivable (net) 55,100 44,800
Inventory 65,400 45,100
Prepaid expenses 15,200 25,100
Equipment 89,200 74,200
Accumulated depreciation 6quipment (17,840) (7,900)
Land 70,700 40,400
$307,560 $256,500
Accounts payable $65,500 $52,000
Accrued expenses 15,100 18,100
Notes payable 6bank, long-term 60 6 23,100
Bonds payable 30,000 60 6
Common stock, $10 par 188,100 157,800
1. **State the problem:** We are given the balance sheet data of Ivanhoe Company for the years 2028 and 2027. We want to analyze the changes in assets, liabilities, and equity.
2. **Calculate total assets for each year:**
Total assets = Cash + Accounts receivable + Inventory + Prepaid expenses + Equipment - Accumulated depreciation + Land
For 2028:
$$29,800 + 55,100 + 65,400 + 15,200 + 89,200 - 17,840 + 70,700 = 307,560$$
For 2027:
$$34,800 + 44,800 + 45,100 + 25,100 + 74,200 - 7,900 + 40,400 = 256,500$$
3. **Calculate total liabilities for each year:**
Total liabilities = Accounts payable + Accrued expenses + Notes payable + Bonds payable
For 2028:
$$65,500 + 15,100 + 0 + 30,000 = 110,600$$
For 2027:
$$52,000 + 18,100 + 23,100 + 0 = 93,200$$
4. **Calculate total equity for each year:**
Equity = Common stock
For 2028:
$$188,100$$
For 2027:
$$157,800$$
5. **Verify the accounting equation:**
Assets = Liabilities + Equity
For 2028:
$$307,560 = 110,600 + 188,100 = 298,700$$
Note: There is a discrepancy of $$307,560 - 298,700 = 8,860$$ which may be due to retained earnings or other equity accounts not listed.
For 2027:
$$256,500 = 93,200 + 157,800 = 251,000$$
Discrepancy of $$256,500 - 251,000 = 5,500$$ similarly.
6. **Summary:**
- Total assets increased by $$307,560 - 256,500 = 51,060$$ from 2027 to 2028.
- Total liabilities increased by $$110,600 - 93,200 = 17,400$$.
- Common stock increased by $$188,100 - 157,800 = 30,300$$.
This analysis helps understand the financial position changes of Ivanhoe Company between 2027 and 2028.