a) Calculate and show the current ratio, and acid test ratio to one decimal point for each year

b) For each year, generate a common-size income statement. Display your results to one decimal point.

c) Prepare a trend analysis of the balance sheets, using 2013 as the base year.

Again, one decimal point, please.

742 CHAPTER 17. ANALYZING FINANCIAL STATEMENTS 170-4 From the financial information about MBD Incorporated shown in Figures 17-24 and 17-25 a. Calculate and show the current ratio, and acid-test ratio to one decimal point for each year b. For each year, generate a common size income statement. Display your results to one decimal point. c. Prepare a trend analysis of the balance sheets, using 2013 as the base year. Again - one decimal point, please For students who are using a computer. consider using the file in the Chapter 17 area on the MAL FIGURE 17.24 Comparative Statement for MBD Incorporated MBD INCORPORATED COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013 DECEMBER 31 2015 2014 2013 Sales $752,140 5706.938 $682.519 Less, Cost of Goods Sold 389,623 352.084 342,608 Gross Profit 362.517 354.874 339,911 Expenses: Administrative expenses. including salaries 87.625 84,704 78,480 Advertising 14,934 15.882 12,674 Amortization 28.512 30,406 32,614 Insurance 4,850 4.736 4.242 Interest 19.618 22.084 25,613 Miscellaneous 6384 7,413 5.289 Office 12.614 12.418 12.076 Rent 18.000 18.000 15.000 Sales Salaries 128.462 122.475 118,200 Travel 16.847 14.092 24.824 Utilities 6,482 5.836 4.908 Total Expenses 344,358 338,046 333.920 Income before Income Taxes 18.159 16,828 5.991 Income Tax 3.269 3,029 1,078 Net Income $ 14,890 S 13.799 S4.913 CHAPTER 17. ANALYZING FINANCIAL STATEMENTS FIGURE 17.25 MBD INCORPORATED BALANCE SHEET AS OF DECEMBER 31, 2015, 2014. AND 2013 DECEMBER 31 2015 2014 2013 Assets Current Assets: Cash $ 12.642 8,033 1 1086 Accounts Receivable 72.455 74.500 64615 Merchandise Inventory 96,008 82.991 84617 Prepaid Expenses 4.682 4,487 4.138 Total Current Assets 185.787 170.011 164.456 Capital Assets - net of Accum. Amort. Store and Office equipment 144.266 146,848 152772 Vehicles 29.640 34,078 28,462 Total Capital Assets 173.906 180.926 181,234 Total Assets 5359,693 $350,937 $345,690 Liabilities and Shareholders' Equity Current Liabilities: Demand Loan Payable $ 25.000 28.000 20.000 Income Tax Payable $1.432 1.355 642 Payroll Taxes Owed $3,481 3,576 3.384 Accounts Payable 76.350 71.842 80.215 Accrued Liabilities 2.840 2.964 2.048 Total Current Liabilities 109,103 107,737 106,299 Long-Term Liabilities: Deferred Shareholder's Loan, due 2018 45.000 45.000 45,000 Total Long-Term Liabilities 45.000 45.000 45,000 154,103 Total Liabilities 152.737 151.289 Shareholders' Equity 50,000 Common Shares 50.000 50,000 155.590 Retained Earnings 148.200 144,401 205.590 Total Shareholders' Equity 198.200 194.401 $350,937 $345.690 Total Liabilities and Shareholders' Equity $359,693 After paying a dividend of $10,000 during the year. **After paying a dividend of $7.500 during the year