Question

Problem 13-1A (Part Level Submission) Here are comparative statement data for Crane Company and Sheridan Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016 Crane Company Sheridan Company 2017 2016 2017 2016 Net sales Cost of goods sold Operating expenses Interest expense Income tax expense $1,855,000 1,063,000 265,000 8,600 74,900 $596,000 291,000 89,000 3,200 35,000 Current assets Plant assets (net) Current liabilities Long-term liabilities 534,599 $512,352 136,671 $ 130,326 863,952 820,000 229,154 206,332 108,773 124,337 186,944 147,600 57,971 49,661 48,577 41,000 Common stock, $10 par 820,000 820,000 196,800 196,800 Retained earnings 282,834 240,416 62,477 49,197 Prepare a vertical analysis of the 2017 income statement data for Crane Company and Sheridan Company. (Round all ratios to 1 decimal place, e.g. 2.5%.) Condensed Income Statement For the Year Ended December 31, 2017 Crane Company Sheridan Company Dollars Dollars 96 $596,000 % 291,000 % 305,000 89,000 % 216,000 Percent Percent $1,855,000 1,063,000 792,000 265,000 527,000 8,600 3,200 518,400 % 212,800

Answer 1

Percent will calculate by value of respective expense or income divided by sales. for example Cost of goods sold for Crane company wll be $1,063,000/$1,855,000 = 57.3%

Condensed Income Statement
For the Year Ended December 31, 2017
	Crane Company		Sheridan Company
	Dollars	Percent	Dollars	Percent
Net sales	$ 1,855,000	100.0%	$ 596,000	100.0%
Cost of goods sold	$ 1,063,000	57.3%	$ 291,000	48.8%
Gross profit	$     792,000	42.7%	$ 305,000	51.2%
Operating expense	$     265,000	14.3%	$    89,000	14.9%
Operating income	$     527,000	28.4%	$ 216,000	36.2%
Non-operating item
Interest expenses	$          8,600	0.5%	$      3,200	0.5%
Income before income tax	$     535,600	28.9%	$ 212,800	35.7%
Income tax	$        74,900	4.0%	$    35,000	5.9%
Net income	$     460,700	24.8%	$ 177,800	29.8%

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