The stockholders of Buffalo Chips Corporation owned 40,000 shares of its common stock during all of 2000. The corporation pays income taxes at a rate of 40% and had the following balances in its income statement accounts at the end of 2000:

Administrative expenses $ 67,400 Cost of goods sold 302,000 Interest expense 3,500 Interest revenue 1,700 Sales (net) 563,800 Selling expenses 40,600 Required: (1) Prepare a 2000 income statement for Buffalo Chips Corporation.
(2) Compute the profit margin of Buffalo Chips Corporation for 2000. How does this compare with the industry average of 17.4%?

10-34 10-35 10-36 Stockholders of the Tomar Export Corporation owned 4,000 shares of common stock during all of this year. The corporation listed the following items in its financial statements on December 31 of this year:
Net income $ 10,000 Current assets 15,000 Average stockholders’ equity 70,000 Cost of goods sold 72,000 Total liabilities 25,000 Net sales 100,000 Current liabilities 6,000 Average inventory : 9,000 Total assets 100,000 Required: Using the preceding information, compute the following ratios of the Tomar Export Corporation for this year: (1) earnings per share, (2) gross profit percentage, (3) profit margin, (4) return on owners’ (stockholders’) equity, (5) current ratio, (6) inventory turnover, and (7) debt ratio.
Taboue Cutlery Corporation showed the following income statement information for the years 2000 and 2001:

Taboue Cutlery Corporation Comparative Income Statements For Years Ended December 31 Year-to-Year Increase (Decrease)
2000 2001 Amount Percent Sales (net) $60,000 $65,000 $

(a)

(b) %
Cost of goods sold (33,600)

(c)

(d) (e)
Gross profit $26,400 $27,950 $

(f) (g)
Operating expenses (h) (19,050) 400 (i)
Pretax operating income $ (j) $ 8,900 $1,150 (k)
Income tax expense (3,100) (3,560) (I) (m)
Net Income $ 4,650 $ (n) $ (0) (p)
Number of common shares issued (q) 2,700 (r) 12.6 Earnings per share $1.94 $ 1.98 $ (s) (t)
Required: (1) Determine the appropriate percentages and amounts for the blanks lettered

(a) through (t). Round to the nearest tenth of a percent.
(2) Did you just do horizontal or vertical analysis? Briefly comment on what your analysis reveals. TK-1