Question

Requirements: - Complete the common-size for 2018 and 2017 for both the balance sheets and income statements (orange shaded areas). - Required; Round each answer to one decimal place (i.e. 46.3%) Rocky Road Bicycles, Inc. Comparative Balance Sheets December 31, 2018 and 2017 Rocky Road Bicycles, Inc. Income Statements For the Years Ended December 31, 2018 and 2017 2018 Common Size 2017 Common Size 2018 Common Size 2017 Common Size $ Assets Cash Account receivable Inventory Prepaid rent Plant assets Less accumulated depreciation Total assets $ 105,000 217,000 800,000 50,000 1,854,000 (565,000) $2,461,000 $ 94,000 450,000 700,000 50,000 1,753,000 (502,000) $2,545,000 Net revenue Cost of sales Gross profit Selling, general and administrative expenses Operating profit Interest expense Interest income and other Income before income taxes Provision for income taxes Net Income $ 952,000 447,000 505,000 327,000 178.000 (15,000) 5.000 168,000 32,000 $ 136,000 842.000 395,000 447,000 305,000 142.000 (25,000) 4,000 121,000 25,000 96,000 $ $ Liabilities Accounts payable Wages payable Income tax payable 306,000 27,000 24,000 500,000 27,000 50,000 Equity Common stock 1,242,000 Retained earnings 862,000 Total liabilities and equity $2.461,000 1,242,000 726,000 $2,545,000

Answer 1

Rocky Road Bicycles, Inc.

Comparative Income Statements

For the years ended December 31,2018 and 2017

Particulars	2018	2018	2017	2017
	$	CommonSize	$	CommonSize
Net Revenue	952000	100%	842000	100%
Cost Of Sales	447000	46.9%	395000	46.9%
Gross Profit	505000	53.1%	447000	53.1%
Selling, general and admin exp.	327000	34.4%	305000	36.2%
Operating profit	178000	18.7%	142000	16.9%
Interest Expense	(15000)	(1.6%)	(25000)	(2.9%)
Interest income & other	5000	0.5%	4000	0.4%
Income befoe income taxes	168000	17.6%	121000	14.4%
Provision for income tax	32000	3.4%	25000	3%
Net Income	136000	14.2%	96000	11.4%

Rocky Road Bicycles, Inc.

Comparative Balance sheet

December 31,2018 and 2017

Particulars	2018	2018	2017	2017
	$	CommonSize	$	CommonSize
Assets
Cash	105000	4.3%	94000	3.7%
Acc. receivables	217000	8.8%	450000	17.7%
inventory	800000	32.5%	700000	27.5%
Prepaid rent	50000	2%	50000	1.9%
Plant assets	1854000	75.4%	1753000	68.9%
Less accumulated dep.	(565000)	(23%)	(502000)	(19.7%)
Total assets	2461000	100%	2545000	100
Liabilties
Account Payables	306000	12.4%	500000	19.6%
Wages Payables	27000	1.1%	27000	1.1%
Income Tax Payable	24000	0.9%	50000	2%
Equity
Common Stock	1242000	50.5%	1242000	48.8%
Retained earnings	862000	35.1%	726000	28.5%
Total Liabilties & equity	2461000	100%	2545000	100%