y WileyPLUS I httpsedugen wileypluscomedugenstudentmainfrun

× y WileyPLUS I https://edugen. wileyplus.com/edugen/student/mainfr.uni ractice Assignment Gradebook ORION Downloadable eTextbook gnment Problem 14-1A (Part Level Submission) Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appea 2016 Farris Company Ratzlaff Company 2016 2017 2016 2017 $1,570,000 1,060,000 301,600 $339,700 240,500 79,500 2,500 6,600 Net sales Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $10 par Retained earnings 8,800 53,300 321,000 $312,400 83,200 $79,500 521,100 497,600 139,200 123,300 65,800 74,400 35,800 31,800 108,600 91,200 30,000 24,400 503,500 503,500 123,000 123,000 164,200 140,900 33,600 23,600 (a) Prepare a vertical analysis of the 2017 income statement data for Farris Company and Ratzla 12.1%.) Condensed Income Statement

Solution

Prepare vertical income statement :

	Farris company	Ratzlaff company
	Dollar	Percent	Dollar	Percent
Net sales	1570000	100%	339700	100%
Cost of goods sold	1060000	67.5%	240500	70.8%
Gross profit	510000	32.5%	99200	29.2%
Less: Operating expenses	301600	19.2%	79500	23.4%
Income from operation	208400	13.3%	19700	5.8%
Other expenses
Less: Interest expenses	8800	0.6%	2500	0.7%
Income before tax	199600	12.7%	17200	5.1%
Less: Income tax	53300	3.4%	6600	2.0%
Net income	146300	9.3%	10600	3.1%