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 2014 Sales $ 554,143 $ 424,519 Cost of goods sold 333,594 266,173 2013 $ 294,600 188,544 Gross profit Selling expenses Administrative expenses 220,549 78,688 49,873 158,346 58,584 37,358 106,056 38,887 24,452 Total expenses 128,561 95,942 63,339 Income before taxes Income taxes 91,988 17,110 62,404 12,793 42,717 8,672 Net income $ 74,878 $ 49,611 $ 34,045 KORBIN COMPANY Comparative Balance Sheets December 31, 2015, 2014, and 2013 2015 2014 2013 $ 46,358 Assets Current assets Long-term investments Plant assets, net $ 36,270 1,100 89,972 $ 48,484 4,530 52,489 84,782 Total assets $ 131,140 $ 127,342 $ 105,503 $ $ $ Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings 19,146 65,000 8,125 38,869 18,974 65,000 8,125 35,243 18,463 47,000 5,222 34,818 Total liabilities and equity $ 131,140 $ 127,342 $ 105,503

Answer 1

2
KORBIN COMPANY
Common-Size Comparative Income Statements
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%	62.70%	64.00%
Gross profit	39.80%	37.30%	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%	14.70%	14.50%
Income taxes	3.09%	3.01%	2.94%
Net income	13.51%	11.69%	11.56%
3
KORBIN COMPANY
Balance Sheet Data in Trend Percents
December 31, 2015, 2014, 2013
	2015	2014	2013
Assets
Current assets	95.62%	74.81%	100.00%
Long-term investments	0.00%	24.28%	100.00%
Plant assets, net	161.52%	171.41%	100.00%
Total assets	124.30%	120.70%	100.00%
Liabilities and Equity
Current liabilities	103.70%	102.77%	100.00%
Common stock	138.30%	138.30%	100.00%
Other paid-in capital	155.59%	155.59%	100.00%
Retained earnings	111.63%	101.22%	100.00%
Total liabilities and equity	124.30%	120.70%	100.00%