Question

CALCULATOR PRINTER VER Problem 13-1A (Part Level Submission) Here are comparative statement data for Wildhorse Company and Sandhill Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016. Wildhorse Company Net sales Cost of goods sold Operating expenses Interest expense Income tax expense 2017 $1,899,000 1,062,000 259,000 6,900 69,600 Sandhill Company 2017 $578,000 297,000 88,000 2,500 29,000 Current assets Plant assets (net) Current liabilities Long-term liabilities 518,300 837,612 105,457 181,244 $496,732 795,000 120,545 143,100 132,504 222,168 56,203 47,096 $126,353 200,041 48,147 39,750 Common stock, $10 par Retained earnings 795,000 274,211 795,000 233,086 190,800 60,573 190,800 47,697

Answer 1

Condensed Income Statement For the Year Ended December 31, 2017 Wildhorse Company Sandhill Company Dollars Dollars Percent Percent Net sales 100.0% $ 55.9% $ 44.1% $ 100.0% 1,899,000 578,000 51.4% Cost of goods sold Gross profit Operating expenses Operating income Interest expense 297,000 1,062,000 48.6% 837,000 281,000 13.6% $ 30.4% $ 0.4% $ 88,000 15.2% 259,000 33.4% 578,000 193,000 6,900 0.4% 2,500 30.1% $ 3.7% $ 33.0% Income before tax 571,100 190,500 Income tax expe 5.0% 69,600 29,000 26.4% $ 27.9% Net income 501,500 161,500 %24 %24