McGraWHll Connect The following information applies to the q

McGraW-Hll Connect [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, 2015, 2014, and 2013 2015 2014 2013 243,700 $458,400 351172 220185 Sales Cost of goods sold 275,957 155,968 Gross profit Selling expenses Administrative expenses 82,443 65,093 41,256 130,987 48,462 30,903 87,732 32,168 20,227 Total expenses 06,349 79,365 52,395 Income before taxes Income taxes 51,622 10,583 5,337 7,173 76,094 14,153 Net income $ 61,941 $ 41,039 28,164 KORBIN COMPANYE Comparaive Balance Sheets December 31, 2015.2014, and 2013 2014 2013 Assets Current assets Plant assets, net Total assets $ 46,946 $ 36,729 49,099 3,030 55,780 $134,131$130,246 107909 1,100 92,417 87185 Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings s 19,583$ 19.407 64,000 8,000 38,839 18,884 64,000 8,000 42,548 5,111 37,914 Total liabilities and equity $ 134,131 $ 130,246 $ 107909

Solution

1.

Current Ratio

Choose Numerator

/

Choose Denominator

=

Current Ratio

Current Assets

/

Current Liabilities

=

Current Ratio

2015

$                     46,946

/

$                           19,583

=

2.4

to 1

2014

$                     36,729

/

$                           19,407

=

1.9

to 1

2013

$                     49,099

/

$                           18,884

=

2.6

to 1

2.

KORBIN COMPANY

Common-Size Comparative Income Statements

For Year Ended December 31,2015, 2014, 2013

2015

2014

2013

Sales

100.00

%

100.00

%

100.00

%

Cost of goods Sold

60.20

62.70

64.00

Gross profit

39.80

37.30

36.00

Selling expenses

14.20

13.80

13.20

Administrative expenses

9.00

8.80

8.30

Total expenses

23.21

22.60

21.50

Income before taxes

16.60

14.70

14.50

Income taxes

3.09

3.01

2.94

Net Income

13.51

%

11.69

%

11.56

%

3.

KORBIN COMPANY

Balance Sheet Data in Trend Percentage

December 31,2015, 2014, 2013

2015

2014

2013

Assets

Current Assets

95.61

%

76.84

%

100.00

%

Long-term Investment

0.00

36.30

100.00

Plant assets, net

156.30

165.68

100.00

Total assets

124.30

%

120.70

%

100.00

Liability and Equity

Current Liability

103.70

%

102.77

%

100.00

%

Common Stock

139.13

139.13

100.00

Retained earnings

156.53

156.53

100.00

Other paid-in capital

112.22

102.44

100.00

Total liability and equity

124.30

%

120.70

%

100.00

%

Current Ratio
	Choose Numerator	/	Choose Denominator	=	Current Ratio
	Current Assets	/	Current Liabilities	=	Current Ratio
2015	$                     46,946	/	$                           19,583	=	2.4	to 1
2014	$                     36,729	/	$                           19,407	=	1.9	to 1
2013	$                     49,099	/	$                           18,884	=	2.6	to 1