I reallt need help with this PLEASE Selected comparative financial statements of
ID: 2592179 • Letter: I
Question
I reallt need help with this PLEASE
Selected comparative financial statements of Korbin Company follow PROBLEM SET A KORBIN COMPANY Comparative Income Statements For Years Ended December 31,2014, 2013, and 2012 Problem 13-1A Ratios, common-size statements, and trend percents P1 P2 P3 2014 2013 2012 Sales Cost of goods sold Gross profit Selling expenses $555,000 $340,000 $278,000 283.500 212.500 153.900 271,500 27,500 24,100 50,800 22.800 76,840 73,600 50,500 102,900 50,668 46,920 29,920 mhhe.com/wildFINMANSe Total expenses Income before taxes Income taxes Net income 117,932 50,660 $ 77,132 40,290 $34,830 KORBIN COMPANY Comparative Balance Sheets December 31,2014,2013, and 2012 2014 2013 2012 Assets Current assets $52,390 37,92451.748 3.950 60,000 $152,390 $134,424 $115,698 500 100,000 Plant assets, net Total assets 96,000 Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings Total liabilities and equity . …… $ 22.800 19.960 20.300 60,000 6,000 33,46429.398 72,000 9,000 48,590 72, 000 9,000 34424 $115.699 152,390 $134,424 Required 1. Compute each year's current ratio. (Round ratio amounts to one decimal.) 2. Express the income statement data in common-size percents. (Round percents to two decimals.) 598 Chapter 13 Analysis of Financial Statements CheckExplanation / Answer
Answer:
1
Current Ratio calculation
Current ratio
=Current Asset/Current Liability
2012
2013
2014
Current Assets
51748
$37,924
$52,390
Current Assets
$20,300
$19,960
$22,800
Current Ratio
=Current Asset/Current Liability
$2.55
$1.90
$2.30
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2
Common size income statement presentation
2014
2013
2012
Particulars
Amount
Common size
for 2014
Amount
Common size
for 2013
Amount
Common size
for 2012
Sales
555000
100.00%
340000
100.00%
278000
100.00%
COGS
283500
51.08%
212500
62.50%
153900
55.36%
Gross profit
271500
48.92%
127500
37.50%
124100
44.64%
Selling expenses
102900
18.54%
46920
13.80%
50800
18.27%
Administration expenses
50668
9.13%
29920
8.80%
22800
8.20%
Total expenses
153568
27.67%
76840
22.60%
73600
26.47%
income before taxes
117932
21.25%
50660
14.90%
50500
18.17%
income taxes
40800
7.35%
10370
3.05%
15670
5.64%
Net income
77132
13.90%
40290
11.85%
34830
12.53%
_________________________________________
3
Trends % for Balance sheet presentation
2014
2013
2012
Amount ($)
Trend %
for 2014
Amount ($)
Trend %
for 201
Amount ($)
Trend %
for 2012
Assets:
Current Assets
52390
101.24%
37924
73.29%
51748
100.00%
Long term investment
0
0.00%
500
12.66%
3950
100.00%
Plant Assets, Net
100000
166.67%
96000
160.00%
60000
100.00%
Total Assets
152390
131.71%
134424
116.19%
115698
100.00%
Liabilities and equity:
Current liabilities
22800
112.32%
19960
98.33%
20300
100.00%
common stock
72000
120.00%
72000
120.00%
60000
100.00%
Other paid in capital
9000
150.00%
9000
150.00%
6000
100.00%
Retained earnings
48590
165.28%
33464
113.83%
29398
100.00%
Total liabilities and equity
152390
131.71%
134424
116.19%
115698
100.00%
________________________________________________
4
Current ratio calculation shows that company has enough liquidity to pay out its debt
Common size income statement presentation shows that major expanses items are covered by cost of goods sales and the selling expenses and the net profit margin are increasing year by year
2012
2013
2014
Current Assets
51748
$37,924
$52,390
Current Assets
$20,300
$19,960
$22,800
Current Ratio
=Current Asset/Current Liability
$2.55
$1.90
$2.30