LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales Sales returns and allowances Net sales Cost of merchandise (goods) sold Gross profit Operating expenses: Depreciation Selling and administrative Research Miscellaneous Total operating expenses Income before interest and taxes Interest expense Income before taxes Provision for taxes Net income $23,000 $18,000 100 800 $22,200 $17,900 11,000 7,600 $11,200 $10,300 $ 1,100 $ 800 5,200 950 760 4,000 700 500 $ 8,010 $ 6,000 $ 3,190 $ 4,300 960 700 $ 2,230 $ 3,600 892 1,440 $ 1,338 $ 2,160 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 Assets 2018 2017 Current assets: Cash Accounts receivable Merchandise inventory Prepaid expenses Total current assets Plant and equipment: Building (net) Land Total plant and equipment Total assets Current liabilities: Accounts payable $11,500 $8,500 16,000 12,000 8,000 13,500 23,500 9,500 $59,000 $43,500 $14,000 $10,500 13,000 8,500 $27,000 $19,000 $86,000 $62,500 Liabilities $12,500 $ 6,500 Salaries payable 6,500 Total current liabilities $19,000 4,500 $11,000 Long-term liabilities: Mortgage note payable 21,500 20,000 Total liabilities $40,500 $31,000 Stockholders' Equity Common stock Retained earnings Total stockholders' equity $20,500 $20,500 25,000 11,000 $45,500 $31,500 A Total liabilities and stockholders' equity $86,000 $62,500 Calculate net income (after tax) to the net sales. (Round your answers to the nearest hundredth.) Current assets: Cash Accounts receivable Merchandise inventory Prepaid expenses Total current assets Plant and equipment: Building (net) Total plant and equipment Land Total assets $11,500 $8,500 16,000 12,000 8,000 13,500 23,500 9,500 $59,000 $43,500 $14,000 $10,500 13,000 8,500 $27,000 $19,000 $86,000 $62,500 Liabilities Current liabilities: Accounts payable Salaries payable Total current liabilities $12,500 $ 6,500 6,500 $19,000 $11,000 4,500 Long-term liabilities: Mortgage note payable 21,500 20,000 Total liabilities $40,500 $31,000 Stockholders' Equity Common stock $20,500 $20,500 Retained earnings 25,000 11,000 Total stockholders' equity $45,500 $31,500 Total liabilities and stockholders' equity $86,000 $62,500 Calculate net income (after tax) to the net sales. (Round your answers to the nearest hundredth.) Answer is complete but not entirely correct. Net income to net sales 2018 2017 6.03 12.07 X