Prepare a vertical analysis of the income statement and balance sheet. Show each item on the income statement as a percentage of the net sales for each year. On the balance sheet, show each asset item as a percentage of the total assets and each liability and equity item as a percentage of the total liabilities and stockholders' equity. Round percentages to one decimal place.
Homework Answers
| Miler Electronics Corporation | ||||
| Comparative Income Statement | ||||
| For Years Ended December 31, 20-2 and 20-1 | ||||
| 20-2 | 20-2 | 20-1 | 20-1 | |
| Amount | Percent | Amount | Percent | |
| Net sales (all on account) | $664820 | 100% | $425220 | 100% |
| Cost of goods sold | 394620 | (394620*100/664820)= 59.4% | 259980 | (259980*100/425220)= 61.1% |
| Gross profit | $270200 | (270200*100/664820)= 40.6% | $165240 | (165240*100/425220)= 38.9% |
| Administrative expenses | $65200 | (65200*100/664820)= 9.8% | $43371 | (43371*100/425220)= 10.2% |
| Selling expenses | 66375 | (66375*100/664820)= 10% | 44269 | (44269*100/425220)= 10.4% |
| Total operating expenses | $131575 | (131575*100/664820)= 19.8% | $87640 | (87640*100/425220)= 20.6% |
| Operating income | $138625 | (138625*100/664820)= 20.8% | $77600 | (77600*100/425220)= 18.2% |
| Interest expense | 1266 | (1266*100/664820)= 0.2% | 1178 | (1178*100/425220)= 0.3% |
| Income before income taxes | $137359 | (137359*100/664820)= 20.7% | $76422 | (76422*100/425220)= 17.9% |
| Income tax expense | 31488 | (31488*100/664820)= 4.7% | 13789 | (13789*100/425220)= 3.2% |
| Net income | $105871 | (105871*100/664820)= 15.9% | $62633 | (62633*100/425220)= 14.7% |
2)
| Miler Electronics Corporation | ||||
| Comparative Balance Sheet | ||||
| December 31, 20-2 and 20-1 | ||||
| 20-2 | 20-2 | 20-1 | 20-1 | |
| Amount | Percent | Amount | Percent | |
| Current assets: | ||||
| Cash | $43479 | (43479*100/329129)= 13.2% | $22996 | (22996*100/200894)= 11.4% |
| Receivables (net) | 73904 | (73904*100/329129)= 22.5% | 47460 | (47460*100/200894)= 23.6% |
| Merchandise inventory | 91429 | (91429*100/329129)= 27.8% | 50201 | (50201*100/200894)= 25% |
| Supplies and prepayments | 3767 | (3767*100/329129)= 1.1% | 1157 | (1157*100/200894)= 0.6% |
| Total current assets | $212579 | (212579*100/329129)= 64.6% | $121814 | (121814*100/200894)= 60.6% |
| Property, plant and equipment: | ||||
| Office equipment (net) | $12211 | (12211*100/329129)= 3.7% | $8640 | (8640*100/200894)= 4.3% |
| Factory equipment (net) | 104339 | (104339*100/329129)= 31.7% | 70440 | (70440*100/200894)= 35.1% |
| Total prop., plant and equip. | $116550 | (116550*100/329129)= 35.4% | $79080 | (79080*100/200894)= 39.4% |
| Total assets | $329129 | 100% | $200894 | 100% |
| Liabilities | ||||
| Current liabilities: | ||||
| Notes payable | $9930 | (9930*100/329129)= 3.0% | $5930 | (5930*100/200894)= 3% |
| Accounts payable | 43375 | (43375*100/329129)= 13.2% | 29999 | (29999*100/200894)= 14.9% |
| Accrued and withheld payroll taxes | 6288 | (6288*100/329129)= 1.9% | 5428 | (5428*100/200894)= 2.7% |
| Total current liabilities | $59593 | (59593*100/329129)= 18.1% | $41357 | (41357*100/200894)= 20.6% |
| Stockholders' Equity | ||||
| Common stock ($10 par) | $100000 | (100000*100/329129)= 30.4% | $84000 | (84000*100/200894)= 41.8% |
| Retained earnings | 169536 | (169536*100/329129)= 51.5% | 75537 | (75537*100/200894)= 37.6% |
| Total stockholders' equity | $269536 | (269536*100/329129)= 81.9% | $159537 | (159537*100/200894)= 79.4% |
| Total liab. and stockholders' equity | $329129 | 100% | $200894 | 100% |
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