Problem 13-1A (Part Level Submission) Sunland Company Blossom Company 2017 2016
ID: 2605899 • Letter: P
Question
Problem 13-1A (Part Level Submission)
Sunland Company
Blossom Company
2017
2016
2017
2016
(a)
Condensed Income Statement
For the Year Ended December 31, 2017
Sunland Company
Blossom Company
Dollars
Percent
Dollars
Percent
$1,930,000
%
$620,000
%
1,075,000
%
293,000
%
855,000
%
327,000
%
257,000
%
91,000
%
598,000
%
236,000
%
7,300
%
2,600
%
590,700
%
233,400
%
67,400
%
29,000
%
$523,300
%
$204,400
%
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Problem 13-1A (Part Level Submission)
Here are comparative statement data for Sunland Company and Blossom Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016.Sunland Company
Blossom Company
2017
2016
2017
2016
Net sales $1,930,000 $620,000 Cost of goods sold 1,075,000 293,000 Operating expenses 257,000 91,000 Interest expense 7,300 2,600 Income tax expense 67,400 29,000 Current assets 485,703 $465,491 124,171 $ 118,406 Plant assets (net) 784,932 745,000 208,195 187,460 Current liabilities 98,824 112,964 52,669 45,119 Long-term liabilities 169,845 134,100 44,134 37,250 Common stock, $10 par 745,000 745,000 178,800 178,800 Retained earnings 256,965 218,427 56,763 44,697(a)
Prepare a vertical analysis of the 2017 income statement data for Sunland Company and Blossom Company. (Round all ratios to 1 decimal place, e.g. 2.5%.)Condensed Income Statement
For the Year Ended December 31, 2017
Sunland Company
Blossom Company
Dollars
Percent
Dollars
Percent
Income Before Income TaxesTotal RevenuesDividendsOperating ExpensesNet SalesIncome From OperationsTotal ExpensesCost of Goods SoldExpensesOther Expenses and LossesTotal Operating ExpensesSales RevenuesInterest ExpenseNet Income / (Loss)Other Revenues and GainsIncome Tax ExpenseRetained Earnings, January 1Gross ProfitRetained Earnings, December 31
$1,930,000
%
$620,000
%
Income From OperationsNet SalesRetained Earnings, December 31Income Tax ExpenseTotal RevenuesCost of Goods SoldTotal ExpensesDividendsIncome Before Income TaxesGross ProfitOperating ExpensesInterest ExpenseOther Revenues and GainsOther Expenses and LossesTotal Operating ExpensesExpensesSales RevenuesNet Income / (Loss)Retained Earnings, January 1
1,075,000
%
293,000
%
Total ExpensesOther Expenses and LossesNet Income / (Loss)Total RevenuesTotal Operating ExpensesCost of Goods SoldInterest ExpenseIncome Tax ExpenseSales RevenuesRetained Earnings, December 31Net SalesIncome Before Income TaxesDividendsExpensesOther Revenues and GainsIncome From OperationsGross ProfitOperating ExpensesRetained Earnings, January 1
855,000
%
327,000
%
Sales RevenuesNet Income / (Loss)Gross ProfitOperating ExpensesIncome From OperationsCost of Goods SoldInterest ExpenseRetained Earnings, December 31Retained Earnings, January 1Income Tax ExpenseTotal RevenuesOther Expenses and LossesDividendsTotal ExpensesNet SalesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsExpenses
257,000
%
91,000
%
Retained Earnings, December 31Retained Earnings, January 1Sales RevenuesDividendsTotal ExpensesOther Revenues and GainsTotal RevenuesIncome Before Income TaxesIncome From OperationsNet SalesGross ProfitOther Expenses and LossesOperating ExpensesTotal Operating ExpensesCost of Goods SoldInterest ExpenseIncome Tax ExpenseExpensesNet Income / (Loss)
598,000
%
236,000
%
Other Revenues and GainsGross ProfitIncome From OperationsRetained Earnings, January 1DividendsNet SalesOperating ExpensesOther Expenses and LossesCost of Goods SoldInterest ExpenseIncome Tax ExpenseExpensesNet Income / (Loss)Sales RevenuesTotal Operating ExpensesRetained Earnings, December 31Total ExpensesTotal RevenuesIncome Before Income Taxes
Sales Revenues Cost of Goods Sold Total Revenues Income From Operations Interest Expense Income Before Income Taxes Income Tax Expense Other Revenues and Gains Dividends Retained Earnings, December 31 Expenses Total Expenses Net Income / (Loss) Retained Earnings, January 1 Net Sales Gross Profit Operating Expenses Total Operating Expenses Other Expenses and Losses
7,300
%
2,600
%
Retained Earnings, January 1Other Expenses and LossesNet SalesTotal ExpensesRetained Earnings, December 31Total Operating ExpensesInterest ExpenseGross ProfitCost of Goods SoldIncome From OperationsOther Revenues and GainsSales RevenuesTotal RevenuesOperating ExpensesIncome Before Income TaxesIncome Tax ExpenseDividendsExpensesNet Income / (Loss)
590,700
%
233,400
%
Income Tax ExpenseDividendsIncome Before Income TaxesInterest ExpenseSales RevenuesTotal Operating ExpensesOther Revenues and GainsTotal ExpensesExpensesCost of Goods SoldNet SalesGross ProfitOperating ExpensesNet Income / (Loss)Total RevenuesRetained Earnings, January 1Other Expenses and LossesIncome From OperationsRetained Earnings, December 31
67,400
%
29,000
%
Total Operating ExpensesIncome Before Income TaxesExpensesTotal RevenuesOther Revenues and GainsRetained Earnings, January 1Net Income / (Loss)Retained Earnings, December 31Sales RevenuesGross ProfitOperating ExpensesOther Expenses and LossesTotal ExpensesIncome From OperationsNet SalesIncome Tax ExpenseDividendsCost of Goods SoldInterest Expense
$523,300
%
$204,400
%
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Explanation / Answer
Answer
Sunland Company
Blossom Company
Dollar
%
Dollar
%
Net Sales
1930000
100.0%
620000
100.0%
Cost of Goods Sold
1075000
55.7%
293000
47.3%
Gross Profit
855000
44.3%
327000
52.7%
Operating expense
257000
13.3%
91000
14.7%
Income from Operations
598000
31.0%
236000
38.1%
Interest expense
7300
0.4%
2600
0.4%
Income before Income Taxes
590700
30.6%
233400
37.6%
Income Tax expense
67400
3.5%
29000
4.7%
Net Income/(Loss)
523300
27.1%
204400
33.0%
Sunland Company
Blossom Company
Dollar
%
Dollar
%
Net Sales
1930000
100.0%
620000
100.0%
Cost of Goods Sold
1075000
55.7%
293000
47.3%
Gross Profit
855000
44.3%
327000
52.7%
Operating expense
257000
13.3%
91000
14.7%
Income from Operations
598000
31.0%
236000
38.1%
Interest expense
7300
0.4%
2600
0.4%
Income before Income Taxes
590700
30.6%
233400
37.6%
Income Tax expense
67400
3.5%
29000
4.7%
Net Income/(Loss)
523300
27.1%
204400
33.0%