Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218

Financial statements for Steele Inc. follow.

Steele Inc.
Consolidated Income Statements
(in thousands except per share amounts)
2019 2018 2017
Net sales $7,245,088 $6,944,296 $6,149,218
Cost of goods sold (5,286,253) (4,953,556) (4,355,675)
Gross margin $1,958,835 $1,990,740 $1,793,543
General and administrative expenses (1,259,896) (1,202,042) (1,080,843)
Special and nonrecurring items 2,617 0 0
Operating income $701,556 $788,698 $712,700
Interest expense (63,685) (62,398) (63,927)
Other income 7,308 10,080 11,529
Gain on sale of investments 0 9,117 0
Income before income taxes $645,179 $745,497 $660,302
Provision for income taxes (254,000) (290,000) (257,000)
Net income $391,179 $455,497 $403,302

Steele Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS Dec. 31, 2019 Dec. 31, 2018
Current assets:
Cash and equivalents $320,558 $41,235
Accounts receivable 1,056,911 837,377
Inventories 733,700 803,707
Other 109,456 101,811
Total current assets $2,220,625 $1,784,130
Property and equipment, net 1,666,588 1,813,948
Other assets 247,892 248,372
Total assets $4,135,105 $3,846,450
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $250,363 $309,092
Accrued expenses 347,892 274,220
Other current liabilities 15,700 0
Income taxes 93,489 137,466
Total current liabilities $707,444 $720,778
Long-term debt 650,000 541,639
Deferred income taxes 275,101 274,844
Other long-term liabilities 61,267 41,572
Total liabilities 1,693,812 1,578,833
Stockholders equity:
Preferred stock $100,000 $100,000
Common stock 89,727 89,727
Additional paid-in capitalcommon stock 128,906 127,776
Retained earnings 2,397,112 2,136,794
$2,715,745 $2,454,297
Less: Treasury stock, at cost (274,452) (186,680)
Total stockholders equity $2,441,293 $2,267,617
Total liabilities and stockholders equity $4,135,105 $3,846,450

Required:

1. Prepare a common size income statement for Steele to be used in vertical analysis. Enter your answers in percentage terms, rounded to two decimal places, and do not include the "%" sign with your answer. For example, "100.00" or "28.72". If an amount is zero, enter "0". For those boxes in which underlying dollar amount is shown as negative, use a minus sign. You do not need to include the actual dollar amounts shown above.

Steele Inc.
Consolidated Income Statements
2019 2018 2017
Net sales % % %
Cost of goods sold % % %
Gross margin % % %
General and administrative expenses % % %
Special and nonrecurring items % % %
Operating income % % %
Interest expense % % %
Other income % % %
Gain on sale of investments % % %
Income before income taxes % % %
Provision for income taxes % % %
Net income % % %

Feedback

Prepare a common size balance sheet for Steele to be used in vertical analysis. Enter your answers in percentage terms, rounded to two decimal places, and do not include the "%" sign with your answer. For example, "100.00" or "28.72". If an amount is zero, enter "0". You do not need to include the actual dollar amounts shown above.

Steele Inc.
Component Percentage Balance Sheets
Dec. 31, 2019 Dec. 31, 2018
Current assets:
Cash and equivalents % %
Accounts receivable % %
Inventories % %
Other % %
Total current assets % %
Property and equipment, net % %
Other assets % %
Total assets % %
Current liabilities:
Accounts payable % %
Accrued expenses % %
Other current liabilities % %
Income taxes % %
Total current liabilities % %
Long-term debt % %
Deferred income taxes % %
Other long-term liabilities % %
Total liabilities % %
Stockholders' equity:
Preferred stock % %
Common stock % %
Additional paid-in capital - common stock % %
Retained earnings % %
% %
Less: Treasury stock, at cost % %
Total stockholders' equity % %
Total liabilities and stockholders' equity % %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren

3rd Edition

0131800345, 978-0131800342

More Books

Students also viewed these Accounting questions

Question

Explain the causes of indiscipline.

Answered: 1 week ago