Blossom Company Sunland Company 2017 2016 2017 2016 Warning Don\'t show me this
ID: 2603363 • Letter: B
Question
Blossom Company
Sunland Company
2017
2016
2017
2016
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Condensed Income Statement
For the Year Ended December 31, 2017
Blossom Company
Sunland Company
Dollars
Percent
Dollars
Percent
$1,852,000
%
$590,000
%
1,090,000
%
297,000
%
762,000
%
293,000
%
270,000
%
83,000
%
492,000
%
210,000
%
7,300
%
2,200
%
484,700
%
207,800
%
74,100
%
33,000
%
$410,600
%
$174,800
%
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Blossom Company
Sunland Company
%
%
%
%
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Here are comparative statement data for Blossom Company and Sunland Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016.Blossom Company
Sunland Company
2017
2016
2017
2016
Net sales $1,852,000 $590,000 Cost of goods sold 1,090,000 297,000 Operating expenses 270,000 83,000 Interest expense 7,300 2,200 Income tax expense 74,100 33,000 Current assets 736,704 $706,047 188,339 $ 179,595 Plant assets (net) 1,190,568 1,130,000 315,785 284,335 Current liabilities 149,895 171,342 79,886 68,435 Long-term liabilities 257,617 203,400 66,941 56,500 Common stock, $10 par 1,130,000 1,130,000 271,200 271,200 Retained earnings 389,760 331,305 86,097 67,795Warning
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Prepare a vertical analysis of the 2017 income statement data for Blossom Company and Sunland Company. (Round all ratios to 1 decimal place, e.g. 2.5%.)Condensed Income Statement
For the Year Ended December 31, 2017
Blossom Company
Sunland Company
Dollars
Percent
Dollars
Percent
DividendsIncome Before Income TaxesTotal Operating ExpensesExpensesSales RevenuesNet SalesGross ProfitCost of Goods SoldRetained Earnings, December 31Retained Earnings, January 1Interest ExpenseTotal ExpensesNet Income / (Loss)Other Revenues and GainsTotal RevenuesOperating ExpensesOther Expenses and LossesIncome Tax ExpenseIncome From Operations
$1,852,000
%
$590,000
%
Income Tax ExpenseNet Income / (Loss)Interest ExpenseDividendsNet SalesExpensesRetained Earnings, December 31Retained Earnings, January 1Income From OperationsOther Expenses and LossesCost of Goods SoldSales RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
1,090,000
%
297,000
%
Net SalesIncome From OperationsGross ProfitRetained Earnings, December 31Cost of Goods SoldInterest ExpenseTotal ExpensesIncome Tax ExpenseDividendsTotal Operating ExpensesExpensesNet Income / (Loss)Retained Earnings, January 1Sales RevenuesOperating ExpensesIncome Before Income TaxesTotal RevenuesOther Revenues and GainsOther Expenses and Losses
762,000
%
293,000
%
DividendsGross ProfitInterest ExpenseOperating ExpensesOther Revenues and GainsCost of Goods SoldExpensesNet Income / (Loss)Total RevenuesIncome Tax ExpenseSales RevenuesRetained Earnings, January 1Retained Earnings, December 31Total Operating ExpensesTotal ExpensesIncome Before Income TaxesNet SalesOther Expenses and LossesIncome From Operations
270,000
%
83,000
%
Other Revenues and GainsTotal Operating ExpensesSales RevenuesTotal ExpensesIncome Tax ExpenseInterest ExpenseTotal RevenuesNet Income / (Loss)Gross ProfitNet SalesDividendsIncome Before Income TaxesCost of Goods SoldExpensesOperating ExpensesRetained Earnings, January 1Retained Earnings, December 31Other Expenses and LossesIncome From Operations
492,000
%
210,000
%
Sales RevenuesTotal ExpensesTotal RevenuesGross ProfitRetained Earnings, January 1Income Before Income TaxesNet SalesOther Expenses and LossesIncome Tax ExpenseRetained Earnings, December 31Operating ExpensesNet Income / (Loss)Total Operating ExpensesExpensesOther Revenues and GainsIncome From OperationsCost of Goods SoldInterest ExpenseDividends
Retained Earnings, January 1 Sales Revenues Total Expenses Total Revenues Retained Earnings, December 31 Net Sales Cost of Goods Sold Income Tax Expense Gross Profit Operating Expenses Other Revenues and Gains Total Operating Expenses Income Before Income Taxes Income From Operations Other Expenses and Losses Interest Expense Dividends Expenses Net Income / (Loss)
7,300
%
2,200
%
Other Revenues and GainsSales RevenuesTotal RevenuesExpensesRetained Earnings, January 1Income From OperationsTotal Operating ExpensesGross ProfitCost of Goods SoldIncome Before Income TaxesOther Expenses and LossesIncome Tax ExpenseOperating ExpensesDividendsNet SalesInterest ExpenseNet Income / (Loss)Retained Earnings, December 31Total Expenses
484,700
%
207,800
%
DividendsIncome Tax ExpenseNet SalesTotal ExpensesRetained Earnings, January 1ExpensesNet Income / (Loss)Sales RevenuesOther Expenses and LossesOther Revenues and GainsRetained Earnings, December 31Total RevenuesIncome From OperationsGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesCost of Goods SoldInterest Expense
74,100
%
33,000
%
Net SalesGross ProfitOther Revenues and GainsOperating ExpensesTotal ExpensesOther Expenses and LossesNet Income / (Loss)Retained Earnings, January 1Total Operating ExpensesRetained Earnings, December 31Income Before Income TaxesExpensesIncome Tax ExpenseInterest ExpenseTotal RevenuesIncome From OperationsCost of Goods SoldDividendsSales Revenues
$410,600
%
$174,800
%
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Compute the 2017 return on assets and the return on common stockholders’ equity for both companies. (Round all ratios to 1 decimal place, e.g. 2.5%.)Blossom Company
Sunland Company
Return on assets%
%
Return on common stockholders’ equity%
%
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Click if you would like to Show Work for this question:Explanation / Answer
1) Vertical analysis of the 2017 income statement data for Blossom Company and Sunland Company :
2) 2017 return on assets and the return on common stockholders’ equity for both companies :
Blossom Company Sunland Company Amount $ % Amount $ % Net Sales 1852000 100 590000 100 COGS 1090000 59 287000 50 GP 762000 41 293000 50 Operating Exp 270000 15 83000 14 Income before interest 492000 26 210000 36 Interest 7300 0 2200 0 Income before tax 484700 26 207800 36 Tax exp. 74100 4 33000 6 Net Profit 410600 22 174800 30