Question

Required information 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, 2017, 2016, and 2015 2015 2016 $553,39 $423,94 $294,20 2017 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income taxes Net income 333,141 266,236 188,288 220,249157,706 105,912 78,581 58,504 38,834 49,805 37,307 24,419 128,386 95,811 63,253 91,863 61,895 42, 659 17,08712,689 8,660 $74,776 $49,206 $ 33,999 KORBIN COMPANY Comparative Balance Sheets December 31, 2017, 2016, and 2015 2016 $51,968 $40,659 $ 54,351 95,043 101,094 59,040 2017 2015 Assets Current assets Long-term investments Plant assets, net 1,000 4,880 $147,01 $142,75 $118,27 Total assets Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings Total liabilities and equity $21,464 $21,270 $ 20,697 66,000 66,000 48,000 8,250 51,297 47,23344,241 $147,01 $142,75 $118,27 8,250 5,333

Answer 1

Solution

KORBIN COMPANY
Common size analysis
	2017		2016		2015
Sales	$    5,53,390.00	100.00%	$    4,23,942.00	100.00%	$     2,94,200.00	100.00%
Cost of Goods Sold	$    3,33,141.00	60.20%	$    2,66,236.00	62.80%	$     1,88,288.00	64.00%
Gross Profit	$    2,20,249.00	39.80%	$    1,57,706.00	37.20%	$     1,05,912.00	36.00%
Selling Expenses	$        78,581.00	14.20%	$        58,504.00	13.80%	$        38,834.00	13.20%
Administrative Expenses	$        49,805.00	9.00%	$        37,307.00	8.80%	$        24,419.00	8.30%
Total Expenses	$    1,28,386.00	23.20%	$        95,811.00	22.60%	$        63,253.00	21.50%
Income before taxes	$        91,863.00	16.60%	$        61,895.00	14.60%	$        42,659.00	14.50%
Income Taxes	$        17,087.00	3.09%	$        12,689.00	2.99%	$           8,660.00	2.94%
Net Income	$        74,776.00	13.51%	$        49,206.00	11.61%	$        33,999.00	11.56%