Problem 13-2A Ratios, common-size statements, and trend percents LO P1, P2, P3 T
ID: 2431011 • Letter: P
Question
Problem 13-2A Ratios, common-size statements, and trend percents LO P1, P2, P3 The following information applies to the questions displayed below. Selected comparative financial statements of Korbin Company follow KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2015, 2014, and 2013 2015 321,251 212,389 2013 181,568 102,132 23,547 60,995 41,137 2014 Sales Cost of goods sold 533,640 408,812 283,700 258,778 150,03437448 Gross proft Selling expenses Administrative expenses 75,777 56,416 35,975 92,391 57,643 Total expenses 23,805 Income before taxes Income taxes 88,584 16,477 11,817 8,351 Net income $ 72,107 45,826 32,786 KORBIN COMPANY Comparative Balance Sheets December 31, 2015, 2014, and 2013 2015 2014 2013 Assets Current assets Long-term investments $52,592 41147 55,004 0 800 4,620Explanation / Answer
Korbin Company Common-size comparative Income Statement For years ended December 31,2015,2014 and 2013 2015 % 2014 % 2013 % Sales 100.00 100.00 100.00 Cost of goods sold 60.20 63.30 64.00 Gross Profit 39.80 36.70 36.00 Selling expenses 14.20 13.80 13.20 Administrative Expenses 9.00 8.80 8.30 Total Expenses 23.20 22.60 21.50 Income before taxes 16.60 14.10 14.50 Income taxes 3.09 2.89 2.94 net Income 13.51 11.21 11.56 Working Note Calculation of comparative income statement in the percent 2015 ($) As a percentage of sale(amount/sale*100) 2014 ($) As a percentage of sale(amount/sale*100) 2013($) As a percentage of sale(amount/selling price*100) Sales 533640.00 100.00 408812.00 100.00 283700.00 100.00 Cost of goods sold 321251.00 60.20 258778.00 63.30 181568.00 64.00 Gross Profit 212389.00 150034.00 102132.00 Selling expenses 75777.00 14.20 56416.00 13.80 37448.00 13.20 Administrative Expenses 48028.00 9.00 35975.00 8.80 23547.00 8.30 Total Expenses 123805.00 92391.00 60995.00 Income before taxes 88584.00 16.60 57643.00 14.10 41137.00 14.50 Income taxes 16477.00 3.09 11817.00 2.89 8351.00 2.94 net Income 72107.00 13.51 45826.00 11.21 32786.00 11.56 Please note that purpose of comparative income statement is to compare the revenue and expense of the company in percent over the years to see a clear picture of the growth.