Sanborn Corporation's condensed comparative income statements for 20x8 and 20x7 appear below. The corporation's condensed comparative balance sheets for 20x8 and 20x7 appear on the next page.

Sanborn Corporation

Comparative Income Statements

For the Years Ended December 31, 20x8 and 20x7

Required
1. Prepare schedules showing the amount and percentage changes from 20x7 to 20x8 for the comparative income statements and the balance sheets.
2. Prepare common-size income statements and balance sheets for 20x7 and 20x8.
Sanborn Corporation
Comparative Balance Sheets
December 31, 20x8 and 20x7

Liabilities and Stockholders' Equity

3. Comment on the results in requirements 1 and 2 by identifying favorable and unfavorable changes in the components and composition of the statements.

Transcribed Image Text:

20x8 20x7 Net sales Cost of goods sold Gross margin Operating expenses $3,276,800 $3,146,400 2,008,400 $1,188,000 $1,138,000 2,088,800 Selling expenses $476,800 518,000 423,200 $ 924,000 $ 941,200 $ 264,000 196,800 39,200 $ 198,400 S157,600 56,800 $ 136,000 100,800 $3.40 2.52 Administrative expenses 447,200 Total operating expenses Income from operations Interest expense Income before income taxes Income taxes expense Net income Earnings per share 65,600 62,400 20x8 20x7 Assets Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Total assets 81,200 40,800 229,200 594,800 720,000 $1,641,600 $1,584,800 235,600 574,800 750,000 S 267,600477,200 400,000 Accounts payable Notes payable Bonds payable Common stock, $10 par value Retained earnings Total liabilities and stockholders' equity 200,000 400,000 400,000 374,000307,600 400,000 $1,641,600 $1,584,800